Information acquisition and efficient mechanism design


Bergemann, Dirk and Välimäki, Juuso (2002) Information acquisition and efficient mechanism design. Econometrica, 70, (3), 1007-1033. (doi:10.1111/1468-0262.00317).

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Original Publication URL: http://dx.doi.org/10.1111/1468-0262.00317

Description/Abstract

We consider a general mechanism design setting where each agent can acquire (covert) information before participating in the mechanism. The central question is whether a mechanism exists that provides the efficient incentives for information acquisition ex-ante and implements the efficient allocation conditional on the private information ex-post.

It is shown that in every private value environment the Vickrey-Clark-Groves mechanism guarantees both ex-ante as well as ex-post efficiency. In contrast, with common values, ex-ante and ex-post efficiency cannot be reconciled in general. Sufficient conditions in terms of sub- and supermodularity are provided when (all) ex-post efficient mechanisms lead to private under- or over-acquisition of information.

Item Type: Article
ISSNs: 0012-9682 (print)
Related URLs:
Keywords: auctions, mechanism design, information acquisition, ex-ante and ex-post efficiency
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33408
Date Deposited: 16 May 2006
Last Modified: 27 Mar 2014 18:20
URI: http://eprints.soton.ac.uk/id/eprint/33408

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