Characterization of scalar strategy mechanisms for efficient resource allocation: Supply side case

We give a characterization of scalar strategy mechanisms that efficiently allocate production among strategically interdependent agents. We establish necessary and sufficient conditions for the mechanisms to yield allocations that maximize aggregate surplus of the market under constraints given by the market-clearing equation setting a price at which the total output supplied equals demand. Efficient Nash equilibria of games induced by the proposed class of mechanisms are proved to be asymptotically stable and reachable in a dynamical bidding process. A distributed bidding algorithm is given as well.