ie e e jo u r n a l o n s e l e c t e d a r e a s in c o m m u.pdf

MUNICATIONS,,,AUGUST20071VCG-KellyMechanismsforAllocationofDivisibleGoods:AdaptingVCGMechanismstoOne-DimensionalSignalsSichaoYangandBruceHajekAbstract—TheVCG-Kellymechanismisproposed,municationef?cient,one-dimensionalsignalingideaofKellywiththeVCGmechanism,providingef?cientallocationforstrategicbuyersatNashequi--—,weaddressthemechanismdesignproblem,whichspeci?estherulesforallocationandpayment,,withoutknowingthevaluationfunctionsofthebuyers,ethatisef?cient,’[1,2]showedthat,underthefundamentalassumptionthatallthebuyersareprice-takers,[3]showedthat,forstrategicbuyersusingtheKellymechanismoneachofthelinks,thesumofvaluationsattheequilibriumpointisnolessthan75%oftheef?,-Clark-Groves(VCG)mechanism[4–6]issuchthattruereportingofvaluationfunctionsisadominantstrategyequilibrium,butinthecontextofdivisiblegood