Publication Date: January 2000
We consider a general mechanism design setting where each agent can acquire (covert) information before participating in the mechanism. The central question is whether a mechanism exists which provides the eﬀicient incentives for information acquisition ex-ante and implements the eﬀicient allocation conditional on the private information ex-post.
It is shown that in every private value environment the Vickrey-Groves-Clark mechanism guarantees both ex-ante as well as ex-post eﬀiciency. In contract, with common values, ex-ante and ex-post eﬀiciency cannot be reconciled in general. Suﬀicient conditions in terms of sub- and supermodularity are provided when (all) ex-post eﬀicient mechanisms lead to private under- or over-acquisition of information.