Skip to main content
Article thumbnail
Location of Repository

Mechanism Design with Interdependent Valuations: Surplus Extraction

By Claudio Mezzetti


If valuations are interdependent and agents observe their own allocation payoffs, then two-stage revelation mechanisms expand the set of implementable decision functions. In a two-stage revelation mechanism agents report twice. In the first stage - before the allocation is decided - they report their private signals. In the second stage - after the allocation has been made, but before final transfers are decided - they report their payoffs from the allocation. Conditions are provided under which an uninformed seller can extract (or virtually extract) the full surplus from a sale to privately informed buyers, in spite of the buyers’ signals being independent random variables

Topics: Auctions, Surplus Extraction, Interdependent Valuations, Mechanism Design
Publisher: Dept. of Economics, University of Leicester.
Year: 2006
OAI identifier:

Suggested articles


  1. (2002). Auction Design with Interdependent Valuations: The Generalized Revelation Principle, Efficiency, Full Surplus Extraction and Information Acquisition. doi
  2. (1992). Correlated Information and Mechanism Design. doi
  3. (2001). Efficient Design with Interdependent Valuations. doi
  4. (1991). Ex ante Incentive Efficient Trading Mechanisms without the Private Valuation Restriction. doi
  5. (1988). Full Extraction of Surplus in Bayesian and Dominant Strategy Auctions. doi
  6. (2004). Informational Size and Efficient Auctions. doi
  7. (2004). Mechanism Design with Interdependent Valuations: Efficiency. doi
  8. (1986). Multistage Games with Communication. doi
  9. (1981). Optimal Auction Design. doi
  10. (2006). Optimal Auctions with Asymmetrically Informed Bidders. doi
  11. (1985). Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist when Demands are Interdependent. doi
  12. (1998). S.R.: The Robustness of the Independent Private value Model in Bayesian Mechanism Design. doi
  13. (2004). The Relevance of Private Information inMechanismDesign. doi
  14. (1998). Unique Implementation of the Full Surplus Extraction Outcome in Auctions with Correlated types. doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.