Rank-preserving Multidimensional Mechanisms: an equivalence between identical-object and heterogeneous-object models

TL;DR

This paper establishes an equivalence between mechanisms for selling multiple heterogeneous objects and identical objects, leading to new insights and simplified conditions in mechanism design.

Contribution

It introduces a novel equivalence between heterogeneous and identical object models, enabling transfer of results and simplifications in mechanism design.

Findings

New condition for revenue monotonicity in stochastic mechanisms

Sufficient conditions for non-increasing prices in deterministic mechanisms

Simplified incentive constraints for deterministic mechanisms

Abstract

We show that the mechanism-design problem for a monopolist selling multiple, heterogeneous objects to a buyer with ex ante symmetric and additive values is equivalent to the mechanism-design problem for a monopolist selling identical objects to a buyer with decreasing marginal values. We derive three new results for the identical-objects model: (i) a new condition for revenue monotonicity of stochastic mechanisms, (ii) a sufficient condition on priors, such that prices in optimal deterministic mechanism are not increasing, and (iii) a simplification of incentive constraints for deterministic mechanisms. We use the equivalence to establish corresponding results in the heterogeneous-objects model.