Manipulations by coalitions under asymmetric information: The case of groves mechanisms

We study the formation in coalitions in Vickrey-Clarke-Groves mechanisms, in a model where we assume that asymmetry of information exists within coalitions. The coalitions must therefore use an internal mechanism to give incentives to their members to reveal their information to each other. We show that there exists no mechanism robust to all coalitions;On the other hand, there exist mechanisms robust to coalitions of two agents, and any larger coalition that would form in these mechanisms would be subject to manipulation by subcoalitions. We characterize these mechanisms and show in particular that they are never anonymous. (C) 1996 Academic Press, Inc.