Mechanism design is the field of economics that treats institutions and procedures as variables that can be selected in order to achieve desired objectives. An important aspect of a mechanism is the communication among its participants that it requires, which complements other design features such as incentives and complexity. A calculus-based theory of communication in mechanisms is developed in this book. The value of a calculus-based approach lies in its familiarity as well as the insight into mechanisms that it provides. Results are developed concerning (i) a first order approach to the construction of mechanisms, (ii) the range of mechanisms that can be used to achieve a given objective, as well as (iii) lower bounds on the required communication.
• Mechanism design covering markets, auctions, contests is one of the hottest topics in economics. The 2007 Nobel Prize winners won for mechanism design analysis • The text presents a general theory of communication in economic mechanisms • Accessible calculus-based theory throughout the text
1. Introduction; 2. Classical concepts and results; 3. Applications to mechanisms; 4. Realizing a C∞ mapping.