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Dictatorial Mechanisms in Constrained Combinatorial Auctions

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  • Lerner Anat
  • Gonen Rica

    (The Open University of Israel, Raanana, Israel)

Abstract

We study the possibility space of deterministic, dominant-strategy incentive compatible, individually rational, and Pareto efficient combinatorial auctions in a model with two players and two nonidentical items (four outcomes). Our model has multidimensional types, private values, nonnegative prices, and quasilinear preferences for the players with one relaxation – the players are subject to publicly known budget constraints. We show that the space we study essentially includes one type of mechanisms: autocratic mechanisms (a form of dictatorship). Furthermore, we prove that there are families of autocratic mechanisms that uniquely fulfill the basic properties of deterministic, dominant-strategy incentive compatible, individually rational, and Pareto efficient. The mechanisms in the autocratic families are identical except for two to three price parameters that differentiate them.

Suggested Citation

  • Lerner Anat & Gonen Rica, 2013. "Dictatorial Mechanisms in Constrained Combinatorial Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 1-18, June.
    • Handle: RePEc:bpj:bejtec:v:13:y:2013:i:1:p:18:n:6
    DOI: 10.1515/bejte-2013-0006
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    References listed on IDEAS

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    1. Eric Budish & Estelle Cantillon, 2012. "The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard," American Economic Review, American Economic Association, vol. 102(5), pages 2237-2271, August.
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    Cited by:

    1. Anat Lerner & Rica Gonen, 2014. "Characterizing the Incentive Compatible and Pareto Optimal Efficiency Space for Two Players, k Items, Public Budget and Quasilinear Utilities," Games, MDPI, vol. 5(2), pages 1-19, April.
    2. Rica Gonen & Anat Lerner, 2013. "The Incompatibility of Pareto Optimality and Dominant-Strategy Incentive Compatibility in Sufficiently-Anonymous Budget-Constrained Quasilinear Settings," Games, MDPI, vol. 4(4), pages 1-21, November.

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