Dynamic mechanism design: An elementary introduction
Theoretical Economics
2024-09-10 v1
Abstract
This paper introduces dynamic mechanism design in an elementary fashion. We first examine optimal dynamic mechanisms: We find necessary and sufficient conditions for perfect Bayesian incentive compatibility and formulate the optimal dynamic mechanism problem. We next examine efficient dynamic mechanisms: We establish the uniqueness of Groves mechanism and investigate budget balance of the dynamic pivot mechanism in some detail for a bilateral trading environment. This introduction reveals that many results and techniques of static mechanism design can be straightforwardly extended and adapted to the analysis of dynamic settings.
Cite
@article{arxiv.2106.04850,
title = {Dynamic mechanism design: An elementary introduction},
author = {Kiho Yoon},
journal= {arXiv preprint arXiv:2106.04850},
year = {2024}
}