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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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 |
| Item ID: | 33408 |
| Date Deposited: | 16 May 2006 |
| Last Modified: | 01 Jun 2011 06:38 |
| Contributors: | Bergemann, Dirk (Author) Välimäki, Juuso (Author) |
| Date: | 2002 |
| Status: | Published |
| Contact Email Address: | juuso.valimaki@soton.ac.uk |
| URI: | http://eprints.soton.ac.uk/id/eprint/33408 |
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