Decision Sciences
8 years ago

Efficient Auctions Possible Even with Interdependent Valuations

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Theoretical Economics
Implementation with interdependent valuations
Richard P. McLean, Andrew Postlewaite

Paper Summary

The VCG mechanism can't always achieve efficient outcomes for problems with interdependent values. Small changes to VCG transfers can make agents reveal their types truthfully. Truthful revelation is an approximate equilibrium in these cases. In replicated settings, payments that induce truthfulness can be reduced to zero.

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