Perfect Revenue From Perfectly Informed Players

Maximizing revenue in the presence of perfectly informed players is a well known goal in mechanismdesign. Yet, all current mechanisms for this goal are extremely vulnerable to equilibrium selection. In thispaper we both clarify and rectify this situation by proving that • No (even weakly) dominant-strategy mechanism can guarantee an arbitrarily small fraction of themaximum possible revenue; while• Surviving-strategy mechanisms, a new class of “equilibrium-less” mechanisms, can guarantee a frac-tion arbitrarily close to 1 of the maximum possible revenue. We thus provide the first separation result between dominant-strategy and surviving-strategy mechanisms.