In the private values single object auction model, we construct a satisfactory
mechanism—a dominant strategy incentive compatible and budget-balanced
mechanism satisfying equal treatment of equals. Our mechanism allocates the object
with positive probability to only those agents who have the highest value and satisfies
ex-post individual rationality. This probability is at least (1 − 2
n ), where n is the number
of agents. Hence, our mechanism converges to efficiency at a linear rate as the
number of agents grow. Our mechanism has a simple interpretation: a fixed allocation
probability is allocated using a second-price Vickrey auction whose revenue is redistributed
among all the agents in a simple way. We show that our mechanism maximizes
utilitarian welfare among all satisfactory mechanisms that allocate the object only to
the highest-valued agents.

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• A simple budget-balanced mechanism