Takuro Yamashita, Toulouse. "Large mechanism design with moment-based allocation externality"
Department seminar. Takuro Yamashita is an Assistant Professor at Toulouse School of Economics. He will present the paper: "Large mechanism design with moment-based allocation externality".
In many mechanism design problems in practice, often allocation externality exists (e.g., peer effects in student allocation, and post-license competition in oligopoly). Despite the practical importance, in the literature, mechanism design with allocation externality has not been much explored, perhaps due to the tractability issue of the problem. In this paper, we aim at providing a simple and tractable model of mechanism design with allocation externality. With a mild technical condition, we can fully characterize the optimal mechanism, and moreover, the optimal mechanism has a very simple form in the sense that it is identified by only a few parameters. This simplicity of the optimal mechanism allows us to provide general comparative statics results.