Agents' valuations are interdependent if they depend on the signals, or types, of all agents. Previous literature has implicitly assumed that agents cannot observe their payoffs from a decision and has shown that with interdependent valuations and independent signals efficient design is impossible. This paper shows that if an agent observes his own decision payoff, then it is always possible to find efficient mechanisms. The paper also provides conditions under which it is possible to extract the full surplus from the agents.
 

Keywords: Auctions, Efficiency, Full Surplus Extraction, Information Acquisition, Interdependent Valuations, Mechanism Design.