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Optimal Multiunit Exchange Design

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  • Hitoshi Matsushima

    (Graduate School of Economics, The University of Tokyo)

Abstract

We investigate multiunit exchange where a central planner and participants both bring commodities to sell and the central planner plays the role of platform provider.The central planner has restrictions on allocations. We characterize the optimal mechanism concerning his (her) revenue under incentive compatibility and individual rationality in the ex-post term. We introduce modified virtual valuation and show that the optimization problem can be replaced with the maximization of modified virtual valuations. We apply our results to important problems of single-unit demands and position exchanges. We demonstrate a clock auction design that implements the optimal position allocation through dominant strategies

Suggested Citation

  • Hitoshi Matsushima, 2012. "Optimal Multiunit Exchange Design," CARF F-Series CARF-F-279, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    • Handle: RePEc:cfi:fseres:cf279
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    File URL: https://www.carf.e.u-tokyo.ac.jp/old/pdf/workingpaper/fseries/291.pdf
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    References listed on IDEAS

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    1. Susan Athey & Glenn Ellison, 2011. "Position Auctions with Consumer Search," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1213-1270.
    2. Benjamin Edelman & Michael Schwarz, 2010. "Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions," Harvard Business School Working Papers 10-054, Harvard Business School.
    3. Mark Armstrong, 2000. "Optimal Multi-Object Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 455-481.
    4. Dirk Bergemann & Maher Said, 2010. "Dynamic Auctions: A Survey," Cowles Foundation Discussion Papers 1757, Cowles Foundation for Research in Economics, Yale University.
    5. Benjamin Edelman & Michael Schwarz, 2010. "Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions," American Economic Review, American Economic Association, vol. 100(2), pages 597-602, May.
    6. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007. "Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords," American Economic Review, American Economic Association, vol. 97(1), pages 242-259, March.
    7. Fernando Branco, 1996. "Multiple unit auctions of an indivisible good," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 77-101.
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    Cited by:

    1. Hitoshi Matsushima, 2015. "Optimal Mechanism Design: Type-Independent Preference Orderings," CIRJE F-Series CIRJE-F-955, CIRJE, Faculty of Economics, University of Tokyo.
    2. Hitoshi Matsushima, 2018. "Optimal Deterministic Mechanism Design: Type-Independent Preference Orderings," The Japanese Economic Review, Springer, vol. 69(4), pages 363-373, December.
    3. Hitoshi Matsushima, 2015. "Optimal Mechanism Design: Type-Independent Preference Orderings (Published in the Japanese Economic Review 69 (4), 2018.)," CARF F-Series CARF-F-357, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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