Informational Size and Efficient Auctions, Second Version
27 Pages Posted: 11 May 2003
Date Written: April 13, 2003
Abstract
We develop an auction model for the case of interdependent values and multidimensional signals in which agents' signals are correlated. We provide conditions under which a modification of the Vickrey auction which includes payments to the bidders will result in an ex post efficient outcome. Furthermore, we provide a definition of informational size such that the necessary payments to bidders will be arbitrarily small if agents are sufficiently informationally small.
Note: A previous version of this paper can be downloaded at: http://ssrn.com/abstract=322140
Keywords: Auctions, Incentive Compatibility, Mechanism Design, Interdependent Values
JEL Classification: C70, D44, D60, D82
Suggested Citation: Suggested Citation
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