Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
11023411 | Economics Letters | 2018 | 5 Pages |
Abstract
In quasi-linear environments, classic theories state that it is possible to design efficient and incentive-compatible mechanisms, such as Vickrey, Clarke and Groves (VCG) mechanisms. However, once financial constraints are taken into account, we find that almost no financial constraint is compatible with efficiency and individual incentives over unrestricted domains and some restricted domains. Therefore, our results imply that even in quasi-linear environments, it is still impossible to design an efficient and incentive compatible mechanism because of financial constraints.
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Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jianxin Yi, Hefei Wang, Yong Li,