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Implementability by a Canonical Indirect Mechanism of an Optimal Two-Dimensional Direct Mechanism
Otaru University of Commerce, Otaru, Japan
- 1 Otaru University of Commerce, Otaru, Japan
Theoretical Economics Letters·Volume 07 (2017)·Pages 187–192·Published 3 February 2017·DOI10.4236/tel.2017.72016
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Abstract
The present paper investigates the multi-dimensional mechanism design in which buyers have taste and budget as their private information. The paper shows an easy proof of a two-dimensional optimal direct mechanism by a one-dimensional indirect mechanism: A canonical mechanism in the tradi tional one-dimensional setting, i.e. , function of one variable, the buyer ’ s taste. It also sheds light on where the difficulty lies implementability of a general direct mechanism —not optimal—by a canonical mechanism.
KeywordsMulti-Dimensional MechanismIndirect MechanismBudget ConstraintRevelation Principle
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