Robust Mechanisms Under Common Valuation

Econometrica · 2018 · Volume 86 · Issue 5

Abstract

I construct an informationally robust auction to sell a common-value good. I examine the revenue guarantee of an auction over all information structures of bidders and all equilibria. As the number of bidders gets large, the revenue guarantee of my auction converges to the full surplus, regardless of how information changes as more bidders are added. My auction also maximizes the revenue guarantee when there is a single bidder.

Keywords

Robust mechanism, common-value auction, full surplus extraction, large markets

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