Mechanism Design with Multidimensional, Continuous Types and Interdependent Valuations

Abstract

We consider the mechanism design problem when agents' types are multidimensional and continuous, and their valuations are interdependent. If there are at least three agents whose types satisfy a weak correlation condition, then for any decision rule there exist balanced transfers that render truthful revelation a Bayesian ε-equilibrium. A slightly stronger correlation condition ensures balanced transfers exist that induce a Bayesian Nash equilibrium in which agents' strategies are nearly truthful.

This paper extends the analysis of KSG RWP03-020.

Keywords: Mechanism Design, Interdependent Valuations, Multidimensional Types, Economics - Economic and Econometric Theory

JEL Classification: C70, D60, D70, D82