Credible Auctions: A Trilemma
Mohammad Akbarpour, Shengwu Li
Econometrica · 2020 · Volume 88 · Issue 2
Abstract
Consider an extensive-form mechanism, run by an auctioneer who communicates sequentially and privately with bidders. Suppose the auctioneer can deviate from the rules provided that no single bidder detects the deviation. A mechanism iscredibleif it is incentive-compatible for the auctioneer to follow the rules. We study the optimal auctions in which only winners pay, under symmetric independent private values. The first-price auction is the unique credible static mechanism. The ascending auction is the unique credible strategy-proof mechanism.
Keywords
Mechanism design, auction, credible, strategy-proof, sealed-bid
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