On the Foundations of Ex Post Incentive-Compatible Mechanisms

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2022
Volume: 14
Issue: 4
Pages: 494-514

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper considers an interdependent-value robust mechanism design problem, where the principal has little knowledge about the agent's belief. Although ex post incentive-compatible (EPIC) mechanisms can implement allocations without any knowledge about the agent's belief, we show that, under a certain condition (order-reversing interdependence), there exists a non-EPIC mechanism that achieves a strictly higher expected revenue than any EPIC mechanism given whatever (admissible) belief structure the agent may enjoy. Conversely, with sufficiently small interdependence, such a non-EPIC mechanism does not exist: for some (admissible) belief structure, an EPIC mechanism achieves the highest expected revenue.

Technical Details

RePEc Handle
repec:aea:aejmic:v:14:y:2022:i:4:p:494-514
Journal Field
General
Author Count
2
Added to Database
2026-01-29