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A note on optimal allocation with costly verification
Journal article   Open access   Peer reviewed

A note on optimal allocation with costly verification

Albin Erlanson and Andreas Kleiner
Journal of Mathematical Economics, Vol.84, pp.56-62
2019-10

Abstract

Optimal mechanisms Costly verification BIC and EPIC equivalence
We revisit the problem of a principal allocating an indivisible good with costly verification, as it was formulated and analyzed by Ben-Porath et al. (2014). We establish, in this setting, a general equivalence between Bayesian and ex-post incentive compatible mechanisms. We also provide a simple proof showing that the optimal mechanism is a threshold mechanism.
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