Information acquisition and efficient mechanism design
Information acquisition and efficient mechanism design
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.
auctions, mechanism design, information acquisition, ex-ante and ex-post efficiency
1007-1033
Bergemann, Dirk
436929ea-1d3f-48d5-bf4f-08ef4a2d74b4
Välimäki, Juuso
d9473b09-7596-44dd-ab49-6904c9585e69
2002
Bergemann, Dirk
436929ea-1d3f-48d5-bf4f-08ef4a2d74b4
Välimäki, Juuso
d9473b09-7596-44dd-ab49-6904c9585e69
Bergemann, Dirk and Välimäki, Juuso
(2002)
Information acquisition and efficient mechanism design.
Econometrica, 70 (3), .
(doi:10.1111/1468-0262.00317).
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.
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Published date: 2002
Keywords:
auctions, mechanism design, information acquisition, ex-ante and ex-post efficiency
Identifiers
Local EPrints ID: 33408
URI: http://eprints.soton.ac.uk/id/eprint/33408
ISSN: 0012-9682
PURE UUID: 50bf14ec-28dc-46cd-9110-798367d7da11
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Date deposited: 16 May 2006
Last modified: 15 Mar 2024 07:44
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Author:
Dirk Bergemann
Author:
Juuso Välimäki
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