A note on optimal allocation with costly verification

Albin Erlanson; Andreas Kleiner

doi:10.1016/j.jmateco.2019.06.002

A note on optimal allocation with costly verification

Albin Erlanson, Andreas Kleiner

Arizona State University

Research output: Contribution to journal › Article › peer-review

Abstract

We revisit the problem of a principal allocating an indivisible good with costly verification, as it was formulated and analyzed by Ben-Porath et al. (2014). We establish, in this setting, a general equivalence between Bayesian and ex-post incentive compatible mechanisms. We also provide a simple proof showing that the optimal mechanism is a threshold mechanism.

Original language	English (US)
Pages (from-to)	56-62
Number of pages	7
Journal	Journal of Mathematical Economics
Volume	84
DOIs	https://doi.org/10.1016/j.jmateco.2019.06.002
State	Published - Oct 1 2019

Keywords

BIC and EPIC equivalence
Costly verification
Optimal mechanisms

ASJC Scopus subject areas

Economics and Econometrics
Applied Mathematics

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