Efficient Design with Interdependent Valuations Jehiel, Phillipe; Moldovanu, Benny

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Authors
Jehiel, Phillipe ; Moldovanu, Benny
Appears In
Econometrica
Subjects
Economics; Mathematics; Business
Audience
Academic
Summary
We study efficient, Bayes-Nash incentive compatible mechanisms in a social choice setting that allows for informational and allocative externalities. We show that such mechanisms exist only if a congruence condition relating private and social rates of information substitution is satisfied. If signals are multi-dimensional, the congruence condition is determined by an integrability constraint, and it can hold only in nongeneric cases where values are private or a certain symmetry assumption holds. If signals are one-dimensional, the congruence condition reduces to a monotonicity constraint and it can be generically satisfied. We apply the results to the study of multi-object auctions, and we discuss why such auctions cannot be reduced to one-dimensional models without loss of generality. KEYWORDS: Efficient mechanisms, multi-object auctions, interdependent valuations, multidimensional information
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http://trove.nla.gov.au/work/40705
Work ID
40705

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