Dominant-strategy and Bayesian incentive compatibility in multi-object trading environments

Alejandro Manelli, Daniel R. Vincent

Research output: Contribution to journalArticle

Abstract

When a single-object is to be traded, Bayesian and dominant-strategy incentive compatible mechanisms are interim-utility equivalent in independent, private-values environments; in the same environments, the equivalence breaks down when there are many distinct, indivisible objects to trade. We show that the fixed supply of each type of good imposes strong restrictions on the mechanisms that can be implemented. These restrictions can then be used to determine whether a given Bayesian mechanism has an equivalent dominant-strategy mechanism in a multi-unit model.

Original languageEnglish (US)
Pages (from-to)214-226
Number of pages13
JournalJournal of Mathematical Economics
Volume82
DOIs
StatePublished - May 1 2019
Externally publishedYes

Fingerprint

Incentive Compatibility
Restriction
Indivisible
Incentives
Breakdown
Equivalence
Distinct
Unit
Strategy
Incentive compatibility
Dominant strategy

Keywords

  • Bayesian incentive compatibility
  • Dominant strategy incentive compatibility
  • Multi-dimensional mechanism design

ASJC Scopus subject areas

  • Economics and Econometrics
  • Applied Mathematics

Cite this

Dominant-strategy and Bayesian incentive compatibility in multi-object trading environments. / Manelli, Alejandro; Vincent, Daniel R.

In: Journal of Mathematical Economics, Vol. 82, 01.05.2019, p. 214-226.

Research output: Contribution to journalArticle

@article{c000a33a5c7a4ccb87bf56a32f600163,
title = "Dominant-strategy and Bayesian incentive compatibility in multi-object trading environments",
abstract = "When a single-object is to be traded, Bayesian and dominant-strategy incentive compatible mechanisms are interim-utility equivalent in independent, private-values environments; in the same environments, the equivalence breaks down when there are many distinct, indivisible objects to trade. We show that the fixed supply of each type of good imposes strong restrictions on the mechanisms that can be implemented. These restrictions can then be used to determine whether a given Bayesian mechanism has an equivalent dominant-strategy mechanism in a multi-unit model.",
keywords = "Bayesian incentive compatibility, Dominant strategy incentive compatibility, Multi-dimensional mechanism design",
author = "Alejandro Manelli and Vincent, {Daniel R.}",
year = "2019",
month = "5",
day = "1",
doi = "10.1016/j.jmateco.2019.03.002",
language = "English (US)",
volume = "82",
pages = "214--226",
journal = "Journal of Mathematical Economics",
issn = "0304-4068",
publisher = "Elsevier",

}

TY - JOUR

T1 - Dominant-strategy and Bayesian incentive compatibility in multi-object trading environments

AU - Manelli, Alejandro

AU - Vincent, Daniel R.

PY - 2019/5/1

Y1 - 2019/5/1

N2 - When a single-object is to be traded, Bayesian and dominant-strategy incentive compatible mechanisms are interim-utility equivalent in independent, private-values environments; in the same environments, the equivalence breaks down when there are many distinct, indivisible objects to trade. We show that the fixed supply of each type of good imposes strong restrictions on the mechanisms that can be implemented. These restrictions can then be used to determine whether a given Bayesian mechanism has an equivalent dominant-strategy mechanism in a multi-unit model.

AB - When a single-object is to be traded, Bayesian and dominant-strategy incentive compatible mechanisms are interim-utility equivalent in independent, private-values environments; in the same environments, the equivalence breaks down when there are many distinct, indivisible objects to trade. We show that the fixed supply of each type of good imposes strong restrictions on the mechanisms that can be implemented. These restrictions can then be used to determine whether a given Bayesian mechanism has an equivalent dominant-strategy mechanism in a multi-unit model.

KW - Bayesian incentive compatibility

KW - Dominant strategy incentive compatibility

KW - Multi-dimensional mechanism design

UR - http://www.scopus.com/inward/record.url?scp=85063372918&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85063372918&partnerID=8YFLogxK

U2 - 10.1016/j.jmateco.2019.03.002

DO - 10.1016/j.jmateco.2019.03.002

M3 - Article

VL - 82

SP - 214

EP - 226

JO - Journal of Mathematical Economics

JF - Journal of Mathematical Economics

SN - 0304-4068

ER -