Mechanism Design with Multidimensional, Continuous Types and Interdependent Valuations

29 Pages Posted: 6 Nov 2006

See all articles by Nolan H. Miller

Nolan H. Miller

University of Illinois at Urbana-Champaign

John W. Pratt

Harvard Business School

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Scott Johnson

Australian National University (Deceased)

Date Written: July 2006

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

Suggested Citation

Miller, Nolan and Pratt, John W. and Zeckhauser, Richard J. and Johnson, Scott, Mechanism Design with Multidimensional, Continuous Types and Interdependent Valuations (July 2006). KSG Working Paper No. RWP06-028, Available at SSRN: https://ssrn.com/abstract=939653 or http://dx.doi.org/10.2139/ssrn.939653

Nolan Miller (Contact Author)

University of Illinois at Urbana-Champaign ( email )

1206 South Sixth Street
Champaign, IL 61820
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HOME PAGE: http://www.business.illinois.edu/nmiller

John W. Pratt

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
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Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
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617-384-9340 (Fax)

National Bureau of Economic Research (NBER) ( email )

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617-496-3783 (Fax)

Scott Johnson

Australian National University (Deceased)

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