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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).

Record type: Article


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


Local EPrints ID: 33408
ISSN: 0012-9682
PURE UUID: 50bf14ec-28dc-46cd-9110-798367d7da11

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Date deposited: 16 May 2006
Last modified: 17 Jul 2017 15:52

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Author: Dirk Bergemann
Author: Juuso Välimäki

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