Optimal combinatorial mechanism design (Q2376381)

The paper studies the optimal mechanism design problem, in which a finite set of indivisible objects will be allocated by an uniformed principal among privately informed agents in return for monetary transfers. No assumptions on the relationships between objects are made. First, general assumptions for the model are stated and the concept of Nash incentive compatibility is introduced. Next, the class of mechanisms that satisfy Nash incentive compatibility is characterized in terms of implementability and an envelope condition. Then, environments in which implementability is implied by simpler conditions are identified. In Section 4, the optimal mechanism design problem is analyzed and a sufficient condition as well as a rule for choosing an optimal mechanism for regular problems are given. Section 5 analyzes regular problems further and gives sufficient conditions for regularity in terms of weak quasi-supermodularity conditions. Examples are given to illustrate these results.