Dynamic Mechanism Design

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Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
Date
2019-06
Major/Subject
Mcode
Degree programme
Language
en
Pages
40
235-274
Series
JOURNAL OF ECONOMIC LITERATURE, Volume 57, issue 2
Abstract
We provide an introduction to the recent developments of dynamic mechanism design, with a primary focus on the quasilinear case. First, we describe socially optimal (or efficient) dynamic mechanisms. These mechanisms extend the well-known Vickrey-Clark-Groves and D'Aspremont-Gérard-Varet mechanisms to a dynamic environment. Second, we discuss revenue optimal mechanisms. We cover models of sequential screening and revenue-maximizing auctions with dynamically changing bidder types. We also discuss models of information management where the mechanism designer can control (at least partially) the stochastic process governing the agents' types. Third, we consider models with changing populations of agents over time. After discussing related models with risk-averse agents and limited liability, we conclude with a number of open questions and challenges that remain for the theory of dynamic mechanism design.
Description
Keywords
CONTINUOUS-TIME, INTERDEPENDENT VALUATIONS, INFORMATION DISCLOSURE, REVENUE MAXIMIZATION, SECURITY DESIGN, PRINCIPAL, AGENT, IMPLEMENTATION, CONTRACTS, ARRIVALS
Other note
Citation
Bergemann , D & Välimäki , J 2019 , ' Dynamic Mechanism Design : An Introduction ' , JOURNAL OF ECONOMIC LITERATURE , vol. 57 , no. 2 , pp. 235-274 . https://doi.org/10.1257/jel.20180892