A Note on Optimal Allocation Mechanisms
|Keywords:||mechanism design;optimal auctions;bunching|
|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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