• Corpus ID: 8923323

Knightian Auctions

@article{Chiesa2011KnightianA,
  title={Knightian Auctions},
  author={Alessandro Chiesa and Silvio Micali and Zeyuan Allen Zhu},
  journal={ArXiv},
  year={2011},
  volume={abs/1112.1147}
}
We study single-good auctions in a setting where each player knows his own valuation only within a constant multiplicative factor δ ∈ (0, 1), and the mechanism designer knows δ. The classical notions of implementation in dominant strategies and implementation in undominated strategies are naturally extended to this setting, but their power is vastly different. On the negative side, we prove that no dominant-strategy mechanism can guarantee social welfare that is significantly better than that… 

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Mechanism design with approximate types
TLDR
For general games beyond auctions, the classical problem of maximizing social welfare in auctions when players know their true valuations only within a constant multiplicative factor is studied, and a universality result is provided showing that all reasonable models of type uncertainty are equivalent to the set-theoretic one.

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