The Mechanism Designed With Interdependent Value In Auction

The auction is the inevitable product of the market economy. Is a special, with typical characteristics of the market economy, the most magical way of commodity trading. Through the auction will be most in need of resources allocated to its individuals or units, while the owners have the resources to get the greatest benefits. As a result, the auction is an effective allocation of specific resources.In this paper Introduced some of the basic concept of the auction and special focuses on the benchmark model which built on four basic assumptions: (1) Bidders is risk neutral; (2) Assuming the private value of independent; (3) Pay is only a function of offer; (4) The probability distribution of Bidders valuation is symmetrical. In this model the VCG mechanism which Included the distribution rules and pay rules, for the second auction price will produce an effective distribution.When the benchmark model do not set up such as one of the four basic assumptions do not set up, VCG is not an effective mechanism. In this paper researched the relationship of the single crossing condition and effectiveness, and designed a mechanism to prove this mechanism, making the distribution of goods to be effective.