We consider truthful implementation of the socially efficient allocation in a dynamic private value environment in which agents receive private information over time. We propose a suitable generalization of the Vickrey-Clarke-Groves mechanism, based on the marginal contribution of each agent. In the marginal contribution mechanism, the ex post incentive and ex post participations constraints are satisfied for all agents after all histories. It is the unique mechanism satisfying ex post incentive, ex post participation and efficient exit conditions. We develop the marginal contribution mechanism in detail for a sequential auction of a single object in which only the current winner receives additional information about the object. We show that a modified second price auction leads to truthtelling.
Professor Juuso Välimäki
Dr Juuso Välimäki is a full professor in the Helsinki School of Economics. Between 1999 and 2003 he was a professor at the University of Southampton, and he is currently still a visiting professor here. He received his Ph.D. from the University of Pennsylvania in 1996 and then became assistant professor of economics at Northwestern University in Illinois in1996-1999. Juuso is a renowned economist and has written a number of key publications in top journals including Econometrica and Journal of Economic Theory. His research interests stretch across a variety of fields including Microeconomics, Game Theory, Industrial Organisation and the Economics of Information. He is currently managing editor of the Review of Economic Studies, and on the editorial board of the Finnish Economic Papers and the Scandinavian Journal of Economics.