Payoff equivalence between Bayesian and ex post individually rational dominant strategy mechanisms ★

1999 ◽  
Vol 13 (1) ◽  
pp. 229-237 ◽  
Author(s):  
Georgia Kosmopoulou
Keyword(s):  
Dominant Strategy ◽  
Ex Post

scholarly journals A dominant strategy double clock auction with estimation‐based tâtonnement

2021 ◽  
Vol 16 (3) ◽  
pp. 943-978
Author(s):  
Simon Loertscher ◽  
Claudio Mezzetti
Keyword(s):  
Private Information ◽  
Asymptotic Efficiency ◽  
Incentive Compatibility ◽  
Dominant Strategy ◽  
Demand And Supply ◽  
Strategy Equilibrium ◽  
Ex Post ◽  
Good Market ◽  
Asymptotically Efficient ◽  
Homogeneous Good

The price mechanism is fundamental to economics but difficult to reconcile with incentive compatibility and individual rationality. We introduce a double clock auction for a homogeneous good market with multidimensional private information and multiunit traders that is deficit‐free, ex post individually rational, constrained efficient, and makes sincere bidding a dominant strategy equilibrium. Under a weak dependence and an identifiability condition, our double clock auction is also asymptotically efficient. Asymptotic efficiency is achieved by estimating demand and supply using information from the bids of traders that have dropped out and following a tâtonnement process that adjusts the clock prices based on the estimates.

scholarly journals Multi-Unit Bilateral Trade

2019 ◽  
Vol 33 ◽  
pp. 1973-1980
Author(s):  
Matthias Gerstgrasser ◽  
Paul W. Goldberg ◽  
Bart De Keijzer ◽  
Philip Lazos ◽  
Alexander Skopalik
Keyword(s):  
Social Welfare ◽  
Finite Number ◽  
Bilateral Trade ◽  
Dominant Strategy ◽  
Specific Class ◽  
Single Item ◽  
Incentive Compatible ◽  
Ex Post ◽  
Strategy Incentive

We characterise the set of dominant strategy incentive compatible (DSIC), strongly budget balanced (SBB), and ex-post individually rational (IR) mechanisms for the multi-unit bilateral trade setting. In such a setting there is a single buyer and a single seller who holds a finite number k of identical items. The mechanism has to decide how many units of the item are transferred from the seller to the buyer and how much money is transferred from the buyer to the seller. We consider two classes of valuation functions for the buyer and seller: Valuations that are increasing in the number of units in possession, and the more specific class of valuations that are increasing and submodular.Furthermore, we present some approximation results about the performance of certain such mechanisms, in terms of social welfare: For increasing submodular valuation functions, we show the existence of a deterministic 2-approximation mechanism and a randomised e/(1 − e) approximation mechanism, matching the best known bounds for the single-item setting.

scholarly journals Strategy-Proof Compromises

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Peter Postl
Keyword(s):  
Decision Rules ◽  
Dominant Strategy ◽  
Strategy Implementation ◽  
Necessary Condition ◽  
Sufficient Condition ◽  
Necessary And Sufficient Condition ◽  
Ex Post ◽  
Strategy Proof ◽  
Necessary And Sufficient ◽  
Dominant Strategy Implementation

We study strategy-proof decision rules in the variant of the canonical public good model proposed by Borgers and Postl (2009). In this setup, we fully characterize the set of budget-balanced strategy-proof deterministic mechanisms, which are simple threshold rules. For smooth probabilistic mechanisms, we provide a necessary and sufficient condition for dominant strategy implementation. When allowing for discontinuities in the mechanism, our necessary condition remains valid, but additional conditions must hold for sufficiency. We also show that, among ex post efficient decision rules, only dictatorial ones are strategy-proof. While familiar in spirit, this result is not the consequence of any known result in the literature.

scholarly journals Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords

2007 ◽  
Vol 97 (1) ◽  
pp. 242-259 ◽  
Author(s):  
Benjamin Edelman ◽  
Michael Ostrovsky ◽  
Michael Schwarz
Keyword(s):  
Online Advertising ◽  
Dominant Strategy ◽  
Truth Telling ◽  
Vcg Mechanism ◽  
Strategy Equilibrium ◽  
Ex Post ◽  
Dominant Strategies ◽  
Price Auction ◽  
Second Price Auction ◽  
Generalized Second Price Auction

We investigate the “generalized second-price” (GSP) auction, a new mechanism used by search engines to sell online advertising. Although GSP looks similar to the Vickrey-Clarke-Groves (VCG) mechanism, its properties are very different. Unlike the VCG mechanism, GSP generally does not have an equilibrium in dominant strategies, and truth-telling is not an equilibrium of GSP. To analyze the properties of GSP, we describe the generalized English auction that corresponds to GSP and show that it has a unique equilibrium. This is an ex post equilibrium, with the same payoffs to all players as the dominant strategy equilibrium of VCG. (JEL D44, L81, M37)

scholarly journals “To Promote the General Welfare”: Addressing Political Corruption in America

2016 ◽  
Vol 5 (1) ◽  
pp. 3-55
Author(s):  
Bruce M. Owen
Keyword(s):  
Political Corruption ◽  
Well Being ◽  
Dominant Strategy ◽  
Original Form ◽  
Basic Rights ◽  
The People ◽  
Ex Post ◽  
General Welfare

Abstract Systemic (but lawful) political corruption reduces well-being and equity in America. The original form of Madisonian democracy is no longer capable of containing such corruption. Proposals currently on the table to stem corruption are unlikely to be effective and tend to undermine basic rights. This Essay describes a new, but still Madisonian, approach—regulating the output of corrupted legislative and administrative processes, rather than the inputs. Providing for substantive ex post review of direct and delegated legislation would be far more protective of the “general welfare” of the People than other reforms, while no more or less difficult to implement. Supporting an “umpire” branch may be a dominant strategy for elites themselves.

Research on Bias of Owner's Decision-Making in Risk-Sharing in Construction Project - A Perspective of Bounded Rationality

2013 ◽  
Vol 357-360 ◽  
pp. 2164-2170
Author(s):  
Yi Lin Yin ◽  
Zhi Chao Xu ◽  
Qing Song Zou
Keyword(s):  
Decision Making ◽  
Risk Management ◽  
Quantitative Analysis ◽  
Bounded Rationality ◽  
Loss Aversion ◽  
Risk Sharing ◽  
Dominant Strategy ◽  
Game Model ◽  
Ex Post ◽  
The Cost

Bounded rationality has an important impact on owners decision-making of risk-sharing in the project. Based on the hypothesis of bounded rationality, the paper established a risk-sharing game model concerning owners reference dependency and loss aversion, as well as conducted the quantitative analysis. The finding shows that comparing with the hypothesis of rationality, if taking the ex-post transaction cost as reference, when owner considers that the cost of risk management is smaller, the bounded rationality would make the owner prefer the proper risk-sharing; when owner considers that the cost of risk management is larger, the owner would prefer the improper risk-sharing; when the objective cost of risk management is larger than the ex-post transaction, the improper risk-sharing would be owners dominant strategy, and bounded rationality has no impact on owners decision-making of risk-sharing.

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