Ex-Post Optimal Knapsack Procurement

Arbeitspapier

We consider a budget-constrained mechanism designer who selects an optimal set of projects to maximize her utility. Projects may differ in their value for the designer, and their cost is private information. In this allocation problem, the quantity of procured projects is endogenously determined by the mechanism. The designer faces ex-post constraints: The participation and budget constraints must hold for each possible outcome, while the mechanism must be strategyproof. We identify settings in which the class of optimal mechanisms has a deferred acceptance auction representation which allows an implementation with a descending-clock auction. Only in the case of symmetric projects do price clocks descend synchronously such that the cheapest projects are implemented. The case in which values or costs are asymmetrically distributed features a novel tradeoff between quantity and quality. The reason is that guaranteeing allocation to the most favorable projects under strategyproofness comes at the cost of a diminished expected number of conducted projects.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 27

Classification and Topics

• Classification: Wirtschaft ; Institutions: Design, Formation, Operations, and Impact ; Auctions ; Rationing; Licensing ; Asymmetric and Private Information; Mechanism Design ; National Government Expenditures and Related Policies: Procurement
• Subject: Mechanism Design ; Knapsack ; Budget ; Procurement ; Auction ; Deferred Acceptance Auctions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jarman, Felix ; Meisner, Vincent
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition
• (where): München und Berlin
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/185697
• Last update: 10.03.2025, 11:45 AM CET