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A Note on Optimal Allocation Mechanisms

Authors: Skreta, Vasiliki
Figueroa, Nicolas
Keywords: mechanism design;optimal auctions;bunching
Issue Date: 1-Apr-2008
Series/Report no.: EC-08-13
Abstract: This paper studies revenue-maximizing allocation mechanisms for multiple goods where the buyerís utility can depend non-linearly in his type. We point out that despite strictly increasing virtual utilities, the allocation rule obtained via pointwise optimization may fail to be increasing and thus it may violate incentive compatibility. More importantly, the revenue maximizing allocation may involve randomizations between di§erent allocations.
Appears in Collections:Economics Working Papers

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