Econometrica: Nov, 2020, Volume 88, Issue 6

Mechanism Design with Aftermarkets: Cutoff Mechanisms

https://doi.org/10.3982/ECTA15768
p. 2629-2661

Piotr Dworczak

I study a mechanism design problem in which a designer allocates a single good to one of several agents, and the mechanism is followed by an aftermarket—a post‐mechanism game played between the agent who acquired the good and third‐party market participants. The designer has preferences over final outcomes, but she cannot design the aftermarket. However, she can influence its information structure by publicly disclosing information elicited from the agents by the mechanism.

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