The conditional auction mechanism for sharing a surplus. (English) Zbl 0536.90006

Moulin, H.

Rev. Econ. Stud. 51, 157-170 (1984).

Summary: A first-bid auction to allocate the leadership role is used to choose a public decision and a balanced set of transfers. The mechanism is shown to implement an equal-sharing of the surplus above the ”average” utility level. At the equilibrium an agent’s message reveals the other agent’s utility (when only two players are involved) and the exact value of the joint surplus. A variety of other contexts allow for the construction of similar auction-like mechanisms displaying the same mirror-image effect.

MSC:

91B14

Social choice

Keywords:

conditional auction mechanism; first-bid auction; public decision; balanced set of transfers; mirror-image effect