TY  - GEN
AV  - public
ID  - discovery14538
T3  - ELSE Working Papers
CY  - London, UK
A1  - Jehiel, P.
A1  - Moldovanu, B.
PB  - ESRC Centre for Economic Learning and Social Evolution
Y1  - 2006/03//
N2  - We study the effects of allocative and informational externalities in (multi-object) auctions and related mechanisms. Such externalities naturally arise in
models that embed auctions in larger economic contexts. In particular, they appear when there is downstream interaction among bidders after the auction
has closed. The endogeneity of valuations is the main driving force behind many new, specific phenomena with allocative externalities: even in complete information settings, traditional auction formats need not be efficient, and they may give rise to multiple equilibria and strategic non-participation. But, in the absence of informational externalities, welfare maximization can be
achieved by Vickrey-Clarke-Groves mechanisms. Welfare-maximizing Bayes-Nash implementation is, however, impossible in multi-object settings with informational externalities, unless the allocation problem is separable across objects (e.g. there are no allocative externalities nor complementarities) or signals are one-dimensional. Moreover, implementation of any choice function
via ex-post equilibrium is generically impossible with informational externalities and multidimensional types.
TI  - Allocative and informational externalities in auctions and related mechanisms
UR  - http://else.econ.ucl.ac.uk/newweb/papers.php#2006
ER  -