Knightian Analysis of the Vickrey Mechanism
Name
Knightian Analysis of The Vickrey Mechanism.pdf
Size
450.31 KB
Format
Adobe PDF
Checksum (MD5)
3f8fcad15f99be61f0eb58f705ee6fd2
Author(s)
Chiesa, Alessandro
Micali, Silvio
Zhu, Zeyuan Allen
Date Issued
September 2015
Journal
Econometrica
Publisher
The Econometric Society
Citation
Chiesa, Alessandro, Silvio Micali, and Zeyuan Allen Zhu. “Knightian Analysis of the Vickrey Mechanism.” Econometrica 83, no. 5 (2015): 1727–1754.
Version
Author's final manuscript
Abstract
We analyze the Vickrey mechanism for auctions of multiple identical goods when the players have both Knightian uncertainty over their own valuations and incomplete preferences. In this model, the Vickrey mechanism is no longer dominant‐strategy, and we prove that all dominant‐strategy mechanisms are inadequate. However, we also prove that, in undominated strategies, the social welfare produced by the Vickrey mechanism in the worst case is not only very good, but also essentially optimal.
MIT Department
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
http://dx.doi.org/10.3982/ECTA12131
