Efficient Auction Mechanisms with Interdependent Valuations and Multidimensional Signals

We develop an auction model for the case of interdependent values and multidimensional signals in which agents' information is not independent. We show that a modification of the Vickrey auction which includes payments to the bidders will result in an efficient outcome under very good general conditions. Further, we provide a definition of informational size such that the necessary payments to bidders will be arbitrarily small if agents are sufficiently informationally small.

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