Efficient Auctions and Interdependent Types
We consider the eﬀicient allocation of a single good with interdependent values in a quasi-linear environment. We present an approach to modelling interdependent preferences distinguishing between “payoﬀ types” and “belief types” and report a characterization of when the eﬀicient allocation can be partially Bayesian implemented on a ﬁnite type space. The characterization can be used to unify a number of suﬀicient conditions for eﬀicient partial implementation in this classical auction setting. We report how a canonical language for discussing interdependent types — developed in a more general setting by Bergemann, Morris and Takahashi (2011) — applies in this setting and note by example that this canonical language will not allow us to distinguish some types in the payoﬀ type — belief type language.
Bergemann, Dirk; Morris, Stephen; and Takahashi, Satoru, "Efficient Auctions and Interdependent Types" (2012). Cowles Foundation Discussion Papers. 2205.