Mechanism (biology)

Common value auction

Engineering

Philosophy

Complete information

Microeconomics

Accounting

Economics

Computer science

Risk analysis (engineering)

Business

Mechanical engineering

Physics

Mechanism design

Operations research

Mathematics

Optics

Epistemology

Focus (optics)

Revenue

Mathematical economics

Finance

Cover (algebra)

Journal of Economic Literature

We provide an introduction to the recent developments of dynamic mechanism design, with a primary focus on the quasilinear case. First, we describe socially optimal (or efficient) dynamic mechanisms. These mechanisms extend the well-known Vickrey– Clark–Groves and D’Aspremont–Gérard–Varet mechanisms to a dynamic environment. Second, we discuss revenue optimal mechanisms. We cover models of sequential screening and revenue-maximizing auctions with dynamically changing bidder types. We also discuss models of information management where the mechanism designer can control (at least partially) the stochastic process governing the agents’ types. Third, we consider models with changing populations of agents over time. After discussing related models with risk-averse agents and limited liability, we conclude with a number of open questions and challenges that remain for the theory of dynamic mechanism design. ( JEL D44, D81, D82)

Dynamic Mechanism Design: An Introduction