A characterization of efficient, Bayesian incentive compatible mechanisms

A mechanism that is both efficient and incentive compatible in the Bayesian -Nash sense is shown to be payoff-equivalent to a Groves mechanism at the p oint in time when each agent has just acquired his private information. Thi s equivalence result simplifies the question of whether or not an efficient , Bayesian incentive compatible mechanism can satisfy other desired objecti ves, for the search for an appropriate mechanism can be restricted to the f amily of Groves mechanisms. The method is used to extend the result of Myer son and Satterthwaite on the inefficiency of bilateral bargaining to a mult ilateral setting.