Dynamic mechanism design with interdependent valuations
We consider an infinite horizon dynamic mechanism design problem with interdependent valuations. In this setting the type of each agent is assumed to be evolving according to a first order Markov process and is independent of the types of other agents. However, the valuation of an agent can depend o...
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| Veröffentlicht in: | Review of economic design 2015-09, Vol.19 (3), p.211-228 |
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| creator | Nath, Swaprava Zoeter, Onno Narahari, Y. Dance, Christopher R. |
| description | We consider an infinite horizon dynamic mechanism design problem with interdependent valuations. In this setting the type of each agent is assumed to be evolving according to a first order Markov process and is independent of the types of other agents. However, the valuation of an agent can depend on the types of other agents, which makes the problem fall into an interdependent valuation setting. Designing truthful mechanisms in this setting is non-trivial in view of an impossibility result which says that for interdependent valuations, any efficient and ex-post incentive compatible mechanism must be a constant mechanism, even in a static setting. Mezzetti (Econometrica 72(5):1617–1626,
2004
) circumvents this problem by splitting the decisions of allocation and payment into two stages. However, Mezzetti’s result is limited to a static setting and moreover in the second stage of that mechanism, agents are weakly indifferent about reporting their valuations truthfully. This paper provides a first attempt at designing a dynamic mechanism which is efficient,
strict
ex-post incentive compatible and ex-post individually rational in a setting with interdependent values and Markovian type evolution. |
| doi_str_mv | 10.1007/s10058-015-0177-6 |
| format | Article |
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2004
) circumvents this problem by splitting the decisions of allocation and payment into two stages. However, Mezzetti’s result is limited to a static setting and moreover in the second stage of that mechanism, agents are weakly indifferent about reporting their valuations truthfully. This paper provides a first attempt at designing a dynamic mechanism which is efficient,
strict
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2004
) circumvents this problem by splitting the decisions of allocation and payment into two stages. However, Mezzetti’s result is limited to a static setting and moreover in the second stage of that mechanism, agents are weakly indifferent about reporting their valuations truthfully. This paper provides a first attempt at designing a dynamic mechanism which is efficient,
strict
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In this setting the type of each agent is assumed to be evolving according to a first order Markov process and is independent of the types of other agents. However, the valuation of an agent can depend on the types of other agents, which makes the problem fall into an interdependent valuation setting. Designing truthful mechanisms in this setting is non-trivial in view of an impossibility result which says that for interdependent valuations, any efficient and ex-post incentive compatible mechanism must be a constant mechanism, even in a static setting. Mezzetti (Econometrica 72(5):1617–1626,
2004
) circumvents this problem by splitting the decisions of allocation and payment into two stages. However, Mezzetti’s result is limited to a static setting and moreover in the second stage of that mechanism, agents are weakly indifferent about reporting their valuations truthfully. This paper provides a first attempt at designing a dynamic mechanism which is efficient,
strict
ex-post incentive compatible and ex-post individually rational in a setting with interdependent values and Markovian type evolution.</abstract><cop>Berlin/Heidelberg</cop><pub>Springer Berlin Heidelberg</pub><doi>10.1007/s10058-015-0177-6</doi><tpages>18</tpages><orcidid>https://orcid.org/0000-0001-8309-5006</orcidid></addata></record> |
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| subjects | Behavioral/Experimental Economics Credibility Economic models Economic statistics Economic theory Economic Theory/Quantitative Economics/Mathematical Methods Economics Economics and Finance Equilibrium Game Theory Hospitals Incentives Markov analysis Microeconomics Original Paper Outsourcing Social and Behav. Sciences Studies Valuation |
| title | Dynamic mechanism design with interdependent valuations |
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