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Principled mechanism design with evidence

Schweighofer-Kodritsch, Sebastian; Strausz, Roland - 2025

Casting mechanism design with evidence in the framework of Myerson (1982) implies that his generalized revelation principle directly applies, and we thus obtain standard notions of incentive compatible direct mechanisms. Their specific nature depends, however, on whether the presentation of...

Persistent link: https://www.econbiz.de/10015371822

Security bid auctions for agency contracts

Chŏn, Pyŏng-hŏn; Wolfstetter, Elmar - 2013

A principal uses security bid auctions to award an incentive contract to one among several agents in the presence of hidden action and hidden information. Securities range from cash to equity and call options. "Steeper" securities are better surplus extractors that narrow the gap between the two...

Persistent link: https://www.econbiz.de/10010227234

Auctions with signaling bidders : optimal design and information disclosure

Bos, Olivier; Pollrich, Martin - 2025

takeover bidding, charity auctions, procurement and art auctions. We show that auction revenue can be decomposed into the …

Persistent link: https://www.econbiz.de/10015326255

Keeping the agents in the dark : competing mechanisms, private disclosures, and the revelation principle

Attar, Andrea; Campioni, Eloisa; Mariotti, Thomas; … - 2025

We study the design of market information in competing-mechanism games. We identify a new dimension, private disclosures, whereby the principals asymmetrically inform the agents of how their mechanisms operate. We show that private disclosures have two important effects. First, they can raise a...

Persistent link: https://www.econbiz.de/10015427014

The design of ambiguous mechanisms

Di Tillio, Alfredo; Kos, Nenad; Messner, Matthias - 2014

This paper explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the...

Persistent link: https://www.econbiz.de/10010399062

Selling to the mean

Kos, Nenad; Messner, Matthias - 2015

We study optimal selling strategies of a seller who is poorly informed about the buyer’s value for the object. When the maxmin seller only knows that the mean of the distribution of the buyer's valuations belongs to some interval then nature can keep him to payoff zero no matter how much...

Persistent link: https://www.econbiz.de/10011298549

Rules, discretion, corruption, and efficient sole-sourcing in procurement

Amegashie, J. Atsu - 2024

I study a model of procurement with moral hazard and adverse selection. The procurer is either corrupt or honest and … can choose between sole-sourcing and competitive tender. I compare two procurement regulations: no sole-sourcing is … the gain to corruption is big, a flexible procurement regulation may be better than a rigid procurement regulation. If the …

Persistent link: https://www.econbiz.de/10015125461

Competitive procurement with ex post moral hazard

Chakraborty, Indranil; Khalil, Fahad; Lawarrée, Jacques - 2021

Unlike standard auctions, we show that competitive procurement may optimally limit competition or use inefficient … allocation rules that award the project to a less efficient firm with positive probability. Procurement projects often involve ex … post moral hazard after the competitive process is over. A procurement mechanism must combine an incentive scheme with the …

Persistent link: https://www.econbiz.de/10012421254

Implementing efficient market structure

Grimm, Veronika; Riedel, Frank; Wolfstetter, Elmar - 2000

This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behavior of firms once they are in the market. We adapt the Clark-Groves mechanism, characterize the optimal mechanism that maximizes the weighted...

Persistent link: https://www.econbiz.de/10009781544

An externality-robust auction : theory and experimental evidence

Bartling, Björn; Netzer, Nick - 2014 - This version: April 2014, First version: November 2013

An auction is externality-robust if unilateral deviations from equilibrium leave the other bidders' payoffs unaffected. The equilibrium and its outcome will then persist if certain types of externalities arise between bidders. One example are externalities due to spiteful preferences, which have...

Persistent link: https://www.econbiz.de/10010347030