Ex-post implementation with interdependent values

TL;DR

This paper characterizes ex-post implementable auction rules with interdependent values, introducing the concept of eventual monotonicity as a key condition for implementation in quasi-linear settings.

Contribution

It establishes that ex-post implementability is equivalent to a new condition called eventual monotonicity, extending the understanding of auction design with interdependent values.

Findings

Ex-post implementability is characterized by eventual monotonicity.

Eventual monotonicity is a weaker condition than traditional monotonicity.

The results apply to single object auctions with convex interdependent value functions.

Abstract

We characterize ex-post implementable allocation rules for single object auctions under quasi-linear preferences with convex interdependent value functions. We show that requiring ex-post implementability is equivalent to requiring that the allocation rule must satisfy a condition that we call eventual monotonicity (EM), which is a weakening of monotonicity, a familiar condition used to characterize dominant strategy implementation.