Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324798 
Year of Publication: 
2025
Series/Report no.: 
Working Paper No. 372
Publisher: 
University of California, Department of Economics, Davis, CA
Abstract: 
We study the design of efficient mechanisms under asymmetric awareness and information. Unawareness refers to the lack of conception rather than the lack of information. Assuming quasi-linear utilities and private values, we show that we can implement in conditional dominant strategies a social choice function that is utilitarian ex-post efficient when pooling all awareness of all agents without the need of the social planner being fully aware ex-ante. To this end, we develop novel dynamic versions of Vickrey-Clarke-Groves mechanisms in which types are revealed and subsequently elaborated at endogenous higher awareness levels. We explore how asymmetric awareness affects budget balance and participation constraints. We show that ex-ante unforeseen contingencies are no excuse for deficits. Finally, we propose a modified reverse second price auction for efficient procurement of complex incompletely specified projects.
Subjects: 
Dynamic mechanism design
VCG mechanisms
auctions versus negotiations
unknown unknowns
complex projects
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.