Vickrey-Clarke-Groves

The uniqueness of Groves mechanisms provides an additional simplification to the efficient mechanism design problem when dominant strategy implementations are required. It is sufficient to consider the family of Groves mechanisms, and look for functions hi -) that provide Groves payments that satisfy all of the desired constraints. The Vickrey-Clarke-Groves (VCG) mechanism is an important special case, so named because it reflects the seminal ideas due to Vickrey [100] and Clarke [26]. The VCG mechanism maximizes expected revenue across all strategyproof efficient mechanisms, subject to ex post individual-rationality (IR) constraints. Ex post IR provides ... 

Now, amongst all auctions that produce the efficient allocation, are ex-post individually rational, in which bidding truthfully is a dominant strategy, which one maximizes the revenue of the auctioneer The answer to this question was provided by Groves [35] and Clarke [16] with the impetus coming from Vickrey s seminal 1961 paper [66]. For this reason the auction is called the Vickrey-Clarke-Groves mechanism or VCG for short. We show how to derive it using the ideas described above. 

---

See also in sourсe #XX -- [ ]

---