Publisher:
Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science, Evanston, IL
Abstract:
The property of an allocation rule to be implementable in dominant strategies by a unique payment scheme is called revenue equivalence. In this paper we give a characterization of revenue equivalence based on a graph theoretic interpretation of the incentive compatibility constraints. The characterization holds for any (possibly in¯nite) outcome space and many of the known results about revenue equivalence are immediate consequences.