Document Type
Discussion Paper
Publication Date
1-1-2000
CFDP Number
1248
CFDP Pages
49
Abstract
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 environment the Vickrey-Groves-Clark mechanism guarantees both ex-ante as well as ex-post efficiency. In contract, with common values, ex-ante and ex-post efficiency cannot be reconciled in general. Sufficient conditions in terms of sub- and supermodularity are provided when (all) ex-post efficient mechanisms lead to private under- or over-acquisition of information.
Recommended Citation
Bergemann, Dirk and Välimäki, Juuso, "Information Acquisition and Efficient Mechanism Design" (2000). Cowles Foundation Discussion Papers. 1498.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1498