Econometrica: Jan, 2009, Volume 77, Issue 1
Characterization of Revenue Equivalence
Birgit Heydenreich, Rudolf Müller, Marc Uetz, Rakesh V. Vohra
The property of an allocation rule to be implementable in dominant strategies by a unique payment scheme is called . We give a characterization of revenue equivalence based on a graph theoretic interpretation of the incentive compatibility constraints. The characterization holds for any (possibly infinite) outcome space and many of the known results are immediate consequences. Moreover, revenue equivalence can be identified in cases where existing theorems are silent.