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Optimization and mechanism design

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Abstract

Mechanism design is about optimizing the allocation of resources when the parameters needed to determine an optimal allocation are privately held by the agents who will consume the resources. An agent’s report of her information will influence the resulting allocation which in turn will affect her utility. In such a situation, how can one simultaneously elicit the information that is privately held and choose the optimal allocation? This paper illustrates how standard results in linear programming play a role in the analysis of mechanism design problems. It is not a comprehensive survey. Rather, it focuses on two variations of a particular problem: the allocation of a single object.

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Correspondence to Rakesh V. Vohra.

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My thanks to three anonymous reviewers and Martin Skutella for many useful comments and suggestions.

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Vohra, R.V. Optimization and mechanism design. Math. Program. 134, 283–303 (2012). https://doi.org/10.1007/s10107-012-0559-2

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  • DOI: https://doi.org/10.1007/s10107-012-0559-2

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