TY - JOUR
T1 - Multidimensional Mechanism Design for Auctions with Externalities
AU - Jehiel, Philippe
AU - Moldovanu, Benny
AU - Stacchetti, Ennio
N1 - Copyright:
Copyright 2004 Elsevier Science B.V., Amsterdam. All rights reserved.
PY - 1999/4
Y1 - 1999/4
N2 - In an auction with externalities, a buyer's type is multidimensional and specifies the payoff he would get for each of theN+1 possible outcomes: the seller keeps the object or buyeri(i=1,...,N) gets the object. We provide a characterization of multidimensional incentive compatible mechanisms similar to that for one-dimensional mechanisms. Although reservation utilities are endogenous and type-dependent, the participation constraint is binding for only one "critical" type. A main difficulty in a multidimensional setting is the "integrability" condition. We present a geometric characterization for discontinuous conservative vector fields. In auctions where the buyers submit scalar bids and the seller transfers the object to one of the buyers for sure, a second-price auction maximizes revenue. With two buyers, this auction remains optimal even if the seller can set a reservation price.Journal of Economic LiteratureClassification Numbers: C7, C72.
AB - In an auction with externalities, a buyer's type is multidimensional and specifies the payoff he would get for each of theN+1 possible outcomes: the seller keeps the object or buyeri(i=1,...,N) gets the object. We provide a characterization of multidimensional incentive compatible mechanisms similar to that for one-dimensional mechanisms. Although reservation utilities are endogenous and type-dependent, the participation constraint is binding for only one "critical" type. A main difficulty in a multidimensional setting is the "integrability" condition. We present a geometric characterization for discontinuous conservative vector fields. In auctions where the buyers submit scalar bids and the seller transfers the object to one of the buyers for sure, a second-price auction maximizes revenue. With two buyers, this auction remains optimal even if the seller can set a reservation price.Journal of Economic LiteratureClassification Numbers: C7, C72.
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U2 - 10.1006/jeth.1998.2501
DO - 10.1006/jeth.1998.2501
M3 - Article
AN - SCOPUS:0000978865
VL - 85
SP - 258
EP - 293
JO - Journal of Economic Theory
JF - Journal of Economic Theory
SN - 0022-0531
IS - 2
ER -