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Implementability by a Canonical Indirect Mechanism of an Optimal Two-Dimensional Direct Mechanism

DOI: 10.4236/tel.2017.72016, PP. 187-192

Keywords: Multi-Dimensional Mechanism, Indirect Mechanism, Budget Constraint, Revelation Principle

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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 traditional one-dimensional setting, i.e., function of one variable, the buyers taste. It also sheds light on where the difficulty lies implementability of a general direct mechanism—not optimal—by a canonical mechanism.

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