Information Acquisition and Efficient Mechanism Design

Information Acquisition and Efficient Mechanism Design∗

We consider a general mechanism design setting where each agent can acquire (covert) information before participating in the mechanism. The central question is whether a mechanism exists which provides the efficient incentives for information acquisition ex ante and implements the efficient allocation conditional on the private information ex post. It is shown that in every private value enviro...

Mechanism Design with Information Acquisition: Efficiency and Full Surplus Extraction

Consider a mechanism design setting in which agents acquire costly information about an unknown, payoff-relevant state of nature. Information gathering is covert and the agents’ information is correlated. We investigate conditions under which (i) efficiency and (ii) full surplus extraction are Bayesian incentive compatible and interim individually rational. JEL Classification: D44, D82

Information Acquisition and Efficient Bargaining

In most existing models of bargaining it is assumed that traders know how much they value the object they are bargaining over. However, we observe in practice that economic agents often dedicate time and resources into learning the characteristics of goods and services they are considering to trade. For instance, imagine a consulting firm pitching a project to a potential customer. While the de...

Efficient Mechanism Design∗

We study Bayesian mechanism design in situations where agents’ information may be multi-dimensional, concentrating on mechanisms that lead to efficient allocations. Our main result is that a generalization of the well-known Vickrey-Clarke-Groves mechanism maximizes the planner’s “revenue” among all efficient mechanisms. This result is then used to study multiple object auctions in situations wh...

1423 Information Acquisition and Institutional Design