Mechanism Design
A Linear Programming Approach

This book provides an account of the underlying mathematics of mechanism design based on linear programming.

Rakesh V. Vohra (Author)

9781107004368, Cambridge University Press

Hardback, published 16 May 2011

184 pages, 11 b/w illus.
22.9 x 15.2 x 1.4 cm, 0.44 kg

'The book does not assume any prior knowledge of mechanism design, but requires some familiarity with game theory, linear programming and convex analysis. As such, it is well suited to students and graduates of economic courses, but also to researchers and experienced mechanism designers.' Vangelis Grigoroudis, Zentralblatt MATH

Mechanism design is an analytical framework for thinking clearly and carefully about what exactly a given institution can achieve when the information necessary to make decisions is dispersed and privately held. This analysis provides an account of the underlying mathematics of mechanism design based on linear programming. Three advantages characterize the approach. The first is simplicity: arguments based on linear programming are both elementary and transparent. The second is unity: the machinery of linear programming provides a way to unify results from disparate areas of mechanism design. The third is reach: the technique offers the ability to solve problems that appear to be beyond solutions offered by traditional methods. No claim is made that the approach advocated should supplant traditional mathematical machinery. Rather, the approach represents an addition to the tools of the economic theorist who proposes to understand economic phenomena through the lens of mechanism design.

1. Introduction
2. Arrow's theorem and its consequences
3. Network flow problem
4. Incentive compatibility
5. Efficiency
6. Revenue maximization
7. Rationalizability.

Subject Areas: Optimization [PBU], Economic theory & philosophy [KCA], Research methods: general [GPS], Risk assessment [GPQD]