Search mechanisms
type: Item
instance of: scholarly article
title: Search mechanisms
zbMATH Open document ID: 0636.90006
author: R. Preston McAfee
author: John McMillan
published in: Journal of Economic Theory
publication date: 1988-01-01T00:00:00Z
review text: Extending the Revelation Principle to a case in which it is costly for the principal to communicate with any agent, we show that there is a sequential direct mechanism that is optimal in the class of all mechanisms. We then apply this result to the problem of a monopsonist seeking to buy an indivisible good from one of a set of possible sellers with unobservable production costs. With costly communication, the monopsonist's optimal procurement mechanism is a combination of reservation-price search and auction.
Mathematics Subject Classification ID: 91B24
zbMATH DE Number: 4037548
zbMATH Keywords: Revelation Principle
zbMATH Keywords: sequential direct mechanism
zbMATH Keywords: monopsonist
zbMATH Keywords: unobservable production costs
zbMATH Keywords: costly communication
zbMATH Keywords: optimal procurement mechanism
MaRDI profile type: Publication
cites work: Equilibrium Price Dispersion
cites work: On the difficulty of eliciting summary information
cites work: Duration of offers, price structure, and the gain from search
cites work: Optimal Auctions with Risk Averse Buyers
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cites work: Competitive bidding with entry costs
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description: scientific article; zbMATH DE number 4037548