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Mixed Bundling Auctions

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  • Philippe Jehiel
  • Moritz Meyer-Ter-Vehn
  • Benny Moldovanu

Abstract

We study multi-object auctions where agents have private and additive valuations for heterogeneous objects. We focus on the revenue properties of a class of dominant strategy mechanisms where a weight is assigned to each partition of objects. The weights influence the probability with which partitions are chosen in the mechanism. This class contains efficient auctions, pure bundling auctions, mixed bundling auctions, auctions with reserve prices and auctions with pre-packaged bundles. For any number of objects and bidders, both the pure bundling auction and separate, efficient auctions for the single objects are revenue-inferior to an auction that involves mixed bundling.

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Paper provided by UCLA Department of Economics in its series Levine's Bibliography with number 122247000000001123.

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Date of creation: 08 Feb 2006
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Handle: RePEc:cla:levrem:122247000000001123

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  1. McAfee, R Preston & McMillan, John & Whinston, Michael D, 1989. "Multiproduct Monopoly, Commodity Bundling, and Correlation of Values," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 104(2), pages 371-83, May.
  2. Gui,Hongwei & Müller,Rudolf & Vohra,Rakesh, 2004. "Dominant Strategy Mechanisms with Multidimensional Types," Research Memorandum 047, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  3. Jehiel, Phillipe & Moldovanu, Benny & Stacchetti, E., 1997. "Multidimensional Mechanism Design for Auctions with Externalities," Sonderforschungsbereich 504 Publications 97-04, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
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  7. Avery, Christopher & Hendershott, Terrence, 2000. "Bundling and Optimal Auctions of Multiple Products," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(3), pages 483-97, July.
  8. Lawrence M. Ausubel & Paul Milgrom, 2002. "Ascending Auctions with Package Bidding," Working Papers, Stanford University, Department of Economics 02004, Stanford University, Department of Economics.
  9. Mookherjee, Dilip & Reichelstein, Stefan, 1992. "Dominant strategy implementation of Bayesian incentive compatible allocation rules," Journal of Economic Theory, Elsevier, vol. 56(2), pages 378-399, April.
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  12. Indranil Chakraborty, 1999. "Bundling decisions for selling multiple objects," Economic Theory, Springer, Springer, vol. 13(3), pages 723-733.
  13. Bulow, Jeremy & Roberts, John, 1989. "The Simple Economics of Optimal Auctions," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(5), pages 1060-90, October.
  14. Holmstrom, Bengt, 1979. "Groves' Scheme on Restricted Domains," Econometrica, Econometric Society, Econometric Society, vol. 47(5), pages 1137-44, September.
  15. Jean-Charles Rochet & Philippe Chone, 1998. "Ironing, Sweeping, and Multidimensional Screening," Econometrica, Econometric Society, Econometric Society, vol. 66(4), pages 783-826, July.
  16. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, Econometric Society, vol. 41(4), pages 617-31, July.
  17. Adams, William James & Yellen, Janet L, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 90(3), pages 475-98, August.
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  19. Palfrey, Thomas R, 1983. "Bundling Decisions by a Multiproduct Monopolist with Incomplete Information," Econometrica, Econometric Society, Econometric Society, vol. 51(2), pages 463-83, March.
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Citations

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Cited by:
  1. Gerrit Frackenpohl & Gert Pönitzsch, 2013. "Bundling Public with Private Goods," Bonn Econ Discussion Papers, University of Bonn, Germany bgse05_2013, University of Bonn, Germany.
  2. Pagnozzi, Marco, 2009. "Resale and bundling in auctions," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 27(6), pages 667-678, November.
  3. Jehiel, Philippe & Moldovanu, Benny, 2005. "Allocative and Informational Externalities in Auctions and Related Mechanisms," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 142, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Sergiu Hart & Noam Nisan, 2012. "Approximate Revenue Maximization with Multiple Items," Discussion Paper Series dp606, The Center for the Study of Rationality, Hebrew University, Jerusalem.
  5. Chakraborty, Indranil & Shyamalkumar, Nariankadu D., 2014. "Revenue and efficiency ranking in large multi-unit and bundle auctions," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 12-21.
  6. Bo Chen, 2013. "Assignment Games with Externalities And Matching-Based Competition," Bonn Econ Discussion Papers, University of Bonn, Germany bgse08_2013, University of Bonn, Germany.
  7. Chakraborty, Indranil, 2006. "Bundle and separate sales in auctions with entry," Games and Economic Behavior, Elsevier, vol. 54(1), pages 31-46, January.
  8. Miravete, Eugenio J., 2011. "Convolution and composition of totally positive random variables in economics," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 479-490.

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