Bayesian Incentive Compatible Parametrization of Mechanisms
We consider a general scheme to construct Bayesian incentive-compatible mechanisms using a suitable ‘variable mechanism parametrization.’ The key idea is to perturb a given direct mechanism, which might not be truth revealing, introducing sufficient variability as a function of agents’ announcements to generate incentives for truthful revelation.We discuss a variable-price auction in a general setting as an example.
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Weber, T. A., & Bapna, A. (2008). Bayesian Incentive Compatible Parametrization of Mechanisms. Journal of Mathematical Economics, 44(3-4), 394–403. https://doi.org/10.1016/j.jmateco.2007.10.002
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