Econometrica Vol. 69 No. 5 2001
Efficient Design with Interdependent Valuations
Abstract
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.
- DOI
- 10.1111/1468-0262.00240
- Volume
- 69
- Issue
- 5
- Pages
- 1237-1259
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref