An implementation of the general optimal mechanism in Esö and Szentes (2007)

• 成果类型: Article
• 署名作者: Liu, Dongri; Lu, Jingfeng
• 署名单位: Shandong University; National University of Singapore
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2025.02.014
• 发表日期: 2025
• 页码: 82-94
• 关键词: Auction design; dynamic mechanism design; implementation

摘要

In this paper, we provide an implementation of the optimal mechanism of Es & ouml; and Szentes (2007) for their general environment without assuming constant marginal utility (in the first-stage type) for the buyers. Our implementation is carried out through a three-stage handicap auction. In stage 1, each buyer, knowing his first-stage type, is required to select a handicap menu by paying a menu fee. A higher menu fee would lead to a more favorable handicap menu, which charges a lower handicap fee for every possible handicap level. In stage 2, each buyer, informed of his second-stage signal, is required to select a handicap by paying a handicap fee specified by his early chosen handicap menu. In stage 3, all buyers compete for the object via a second-price auction with handicaps. The highest bidder wins and pays the sum of his chosen handicap and the second- highest bid.