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Regular type distributions in mechanism design and $$\rho $$ -concavity

Ewerhart, Christian

In: Economic Theory, 2013, vol. 53, no. 3, p. 591-603

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    Title
    • Regular type distributions in mechanism design and $$\rho $$ -concavity
    Author
    • Ewerhart, Christian. Department of Economics, University of Zurich, Winterthurerstrasse 30, 8006, Zurich, Switzerland
    Document Type
    • Postprint
    OAI-PMH Identifier
    • oai:doc.rero.ch:311339
    Summary
    Some of the best-known results in mechanism design depend critically on Myerson's (Math Oper Res 6:58-73, 1981) regularity condition. For example, the second-price auction with reserve price is revenue maximizing only if the type distribution is regular. This paper offers two main findings. First, a new interpretation of regularity is developed—similar to that of a monotone hazard rate—in terms of being the next to fail. Second, using expanded concepts of concavity, a tight sufficient condition is obtained for a density to define a regular distribution. New examples of regular distributions are identified. Applications are discussed