VCG-equivalent in expectation mechanism

Etsushi Fujita, Taiki Todo, Makoto Yokoo, Atsushi Iwasaki

Research output: Contribution to journalArticle

Abstract

In this paper, we develop a new class of iterative mechanisms called a VCG-equivalent in expectation mechanism. To guarantee that sincere strategies are an ex post equilibrium, it inevitably asks an irrelevant query, in which a participant has no incentive to answer the query sincerely. Such an irrelevant query causes unnecessary leakage of private information and a different incentive issue. In a VCG-equivalent in expectation mechanism, the mechanism achieves the same allocation as VCG, but the transfers are the same as VCG only in expectation. We show that in a VCG-equivalent in expectation mechanism, sincere strategies constitute a sequential equilibrium. Also, we develop a general procedure for constructing a VCG-equivalent in expectation mechanism that does not ask any irrelevant query. To demonstrate the applicability of this idea in a practical application, we develop a VCG-equivalent in expectation mechanism that can be applied to the Japanese 4G spectrum auction.

Original languageEnglish
Pages (from-to)156-167
Number of pages12
JournalComputer Software
Volume31
Issue number3
Publication statusPublished - Aug 1 2014

All Science Journal Classification (ASJC) codes

  • Software

Cite this

Fujita, E., Todo, T., Yokoo, M., & Iwasaki, A. (2014). VCG-equivalent in expectation mechanism. Computer Software, 31(3), 156-167.

VCG-equivalent in expectation mechanism. / Fujita, Etsushi; Todo, Taiki; Yokoo, Makoto; Iwasaki, Atsushi.

In: Computer Software, Vol. 31, No. 3, 01.08.2014, p. 156-167.

Research output: Contribution to journalArticle

Fujita, E, Todo, T, Yokoo, M & Iwasaki, A 2014, 'VCG-equivalent in expectation mechanism', Computer Software, vol. 31, no. 3, pp. 156-167.
Fujita E, Todo T, Yokoo M, Iwasaki A. VCG-equivalent in expectation mechanism. Computer Software. 2014 Aug 1;31(3):156-167.
Fujita, Etsushi ; Todo, Taiki ; Yokoo, Makoto ; Iwasaki, Atsushi. / VCG-equivalent in expectation mechanism. In: Computer Software. 2014 ; Vol. 31, No. 3. pp. 156-167.
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