Prosper, today the second largest social lending marketplace with nearly 1.5 million members and $380 million in funded loans, employed an auction mechanism amongst lenders to finance each borrower's loan until 2010. Given that a basic premise of social lending is cheap loans for borrowers, how...

We study the second best in a single unit sale to two bidders. This is the allocation that maximizes the expected social surplus subject to the biddersʼ incentive compatible constraints when the first best is not implementable. We prove that Maskinʼs (1992) result that any first best...

A number of identical objects is allocated to a set of privately informed agents. Agents have linear utility in money. The designer wants to assign objects to agents that possess specific traits, but the allocation can only be conditioned on the willingness to pay and on observable...

Every agent reports his willingness to pay for one unit of a good. A mechanism allocates goods and cost shares to some agents. We characterize the group strategyproof (GSP) mechanisms under two alternative continuity conditions interpreted as tie-breaking rules. With the maximalist rule (MAX) an...

We study all-pay auctions with multiple prizes. The players have the same value for all the certain prizes except for one uncertain prize for which each player has a private value. We characterize the equilibrium strategy and show that, independent of the ranking of the uncertain prize, if the...

A contract auction establishes a contract between a center and one of the bidders. As contracts may describe many terms, preferences over contracts typically display indifferences. The Qualitative Vickrey Auction (QVA) selects the best contract for the winner that is at least as good for the...

We consider a market for indivisible items with m buyers and m sellers. Traders privately know their values/costs, which are statistically dependent. Two mechanisms are considered. The buyer's bid double auction collects bids and asks from traders and determines the allocation by selecting a...

We study the problem of allocating m identical items among nm agents with unit demand and private value for consuming the good. We allow payments and focus on dominant-strategy implementation. In the absence of an auctioneer who can absorb payments collected from the agents, the payments must be...

I consider first-price auctions (FPA) and second-price auctions (SPA) with two asymmetric bidders. The FPA is known to be more profitable than the SPA if the strong bidder's distribution function is convex and the weak bidder's distribution is obtained by truncating or horizontally shifting the...

I examine a contest with identity-dependent rules in which contestants are privately informed and ex ante heterogeneous. A contestant may suffer from a handicap or benefit from a head start. The former reduces the contestantʼs score by a fixed percentage; the latter is an additive bonus....