Crowdfunding with Enhanced Reputation Monitoring Mechanism (Fame) by Omid Torabi Abbas Mirakhor

Author:Omid Torabi, Abbas Mirakhor
Language: eng
Format: epub
Publisher: De Gruyter
Published: 2019-12-23T06:03:17.332000+00:00

3.5.9

Social Choice Functions

A pair (d, t) will be referred to as a social choice function, and at times denoted by f.So The utility that i receives if bµ is the announced vector of types (that operated on by )and i’s true type is is

This formulation of preferences is believed to be quasi-linear.

3.5.10

VCG Mechanism

The mechanism applied in this study is VCG. VCG stands for the initials of the names of the three inventors of this mechanism: Vickrey–Clarke–Groves. Bidders offer bids that include their valuations for the items, without knowing the bids of the other individuals taking part in the auction. The auction system arranges the items in an acceptable manner by charging each person the damage they cause to other bidders. Moreover, it provides bidders with an incentive to bid their true valuations by ensuring that the best strategy for each bidder is to bid their true valuations of the items. It is a generalization of a Vickrey auction14 for multiple items. The auction is named after William Vickrey, Edward H. Clarke and Theodore Groves for their studies that generalized the idea. The VCG auction is a particular application of the more general VCG mechanism. While the VCG auction is intended to make an optimal allocation of items, VCG mechanisms permit for the choice of a socially optimal outcome out of a set of outcomes.

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