Information acquisition and efficient mechanism design

Bergemann, Dirk and Välimäki, Juuso (2002) Information acquisition and efficient mechanism design Econometrica, 70, (3), pp. 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.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1111/1468-0262.00317
ISSNs: 0012-9682 (print)
Keywords: auctions, mechanism design, information acquisition, ex-ante and ex-post efficiency
Subjects: H Social Sciences > H Social Sciences (General)
ePrint ID: 33408
Date :
Date Event
Date Deposited: 16 May 2006
Last Modified: 16 Apr 2017 22:16
Further Information:Google Scholar

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