IE 5545 VCG Mechanism Vickrey-Clarke Groves (VCG) mechanism. Four roommates are considering the purchase of a television. One roommate is not in favor of the purchase. Their true valuations are shown in the table below. 1. What is the decision according to the VCG allocation rule. 2. Compute the payment and total utility of each roommate under the VCG mechansim. That is, using the Clarke tax. 3. Suppose that Melvin misrepresents his valuation for "no TV" to be 250? What is his total utility? v (TV) v(no TV) roommate Bud Cartman Melvin Arush 100 120 0 25 0 0 200 0 payment total utility

IE 5545 VCG Mechanism Vickrey-Clarke Groves (VCG) mechanism. Four roommates are considering the purchase of a television. One roommate is not in favor of the purchase. Their true valuations are shown in the table below. 1. What is the decision according to the VCG allocation rule. 2. Compute the payment and total utility of each roommate under the VCG mechansim. That is, using the Clarke tax. 3. Suppose that Melvin misrepresents his valuation for "no TV" to be 250? What is his total utility? v (TV) v(no TV) roommate Bud Cartman Melvin Arush 100 120 0 25 0 0 200 0 payment total utility

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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