# Tag Info

### What is the difference between contract theory and mechanism design?

Contracts are a subset of all mechanisms where agreements are enforcable. An example of a mechanism that is not a contract: A second price auction (or Vickrey auction) is a truth-telling mechanism ...
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### Multi-item Auctions in Mechanism Design

In addition to @Tomcat's suggestions, you may also want to check out the literature on matching markets. Easley and Kleinberg have an introductory textbook* on the subject. Chapter 10 covers the basic ...
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### Is VCG mechanism applicable in reverse auction? If so, how?

In general, VCG is also applicable to reverse auction settings. VCG is not even restricted to auction settings and can be used quite generally, see wikipedia for an introduction. If you want a deeper ...
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### The influence of restricted type space on incentive compatible mechanism design?

The type space is the support of the belief about the types. It seems a bit weird to allow a mechanism designer to arbitrarily restrict their belief support. However, you are right: if the designer ...
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### VCG mechanism and budget balance

In your example, the playstation is a public good to be used by both roommates. Note that $\theta_1,\theta_2 < \theta_3$, but $\theta_1+\theta_2>\theta_3$, that is, one roommate alone would not ...
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### Single-item single-bidder: why posted price is the only possible DSIC mechanism?

Yes, this follows from Myerson's lemma. A monotone function from an interval to $\{0,1\}$ must be constant or a threshold function that is zero up to a certain point and then one (actually, there are ...
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### AGV mechanism and Individual rationality

The simplest example I could cook up. I might have messed up somewhere. Consider the provision of a public good with two agents, $n=2$. Let the type space be such that $\theta \in \{0,1\}$, and both ...
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### Are direct mechanisms always truthful?

Incentive compatible here means that you have no incentive to lie. A direct mechanism that is not incentive compatible would entice some agents to report a false type.
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### Question on uncertainity

We are given that $u$ is increasing and concave, and $u(0) = 0$. This implies that $\dfrac{u(t)}{t}$ is decreasing in $t$, and also, $\dfrac{u(t)}{t} > u'(t)$ for all $t$. Nicole's maximization ...
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### Bayesian Mechanism vs Prior-free Mechanism

You may need to provide more information for a clear answer. How does the mechanism look like in detail? What is the goal you want to achieve? Regarding your first question, it is not "necessary" to ...
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### Mechanism design when the set of feasible decisions depends on types

I agree with Sander's reply, but want to add that you have to find such a way to circumvent your issue. Standard mechanism design applies to Bayesian games. In a Bayesian game, the action space is ...
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### Auction theory reference request

Mechanism design with multi-dimensional types (here: the willingness-to-pay for each object) is a notoriously difficult problem. Even when you abstract from bundling as you do by assuming that the ...
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