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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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.
|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
|Date Deposited:||16 May 2006|
|Last Modified:||27 Mar 2014 18:20|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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