Advanced Search
MyIDEAS: Login to save this paper or follow this series

Optimal Auction Design For Multiple Objects with Externalities

Contents:

Author Info

  • Vasiliki Skreta
  • Nicolas Figueroa

Abstract

In this paper we characterize the optimal allocation mechanism for $N$ objects, (permits), to $I$ potential buyers, (firms). Firms' payoffs depend on their costs, the costs of competitors and on the final allocation of the permits, allowing for externalities, substitutabilities and complementarities. Firms' cost parameter is private information and is independently distributed across firms. Externalities are type dependent. This has two consequences: first, even though the private information of each firm is one dimensional (its cost), an allocation's virtual valuation (the natural generalization of the virtual valuation introduced in (Myerson (1981) depends on the cost parameters of all firms. Second, the "critical" type of each buyer, (the type for which participation constraint binds) is not exogenously given but depends on the particular mechanism selected. This is not as in the papers by Jehiel, Moldovanu and Stacchetti 1996, 2001, and makes the characterization of the optimum intricate, since the objective function is altered. However, the feasibility constraints remain tractable, which makes the use of variational methods possible. A further consequence of having type-dependent externalities, which does not arise in the previous work, is that not only payments, but also the revenue maximizing allocation is different from the optimum derived without taking into account the existence of externalities. Our model captures key features of many important multi-object allocation problems like the allocation of time slots for TV commercials, landing slots in airports, privatization and firm takeovers

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 287.

as in new window
Length:
Date of creation: 11 Aug 2004
Date of revision:
Handle: RePEc:ecm:latm04:287

Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Email:
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC

Related research

Keywords: Optimal Auctions; Multiple Objects; Externalities; Mechanism Design;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Gale, I., 1990. "A Multiple-Object Auction With Superadditive Values," Working papers 9008, Wisconsin Madison - Social Systems.
  2. ehiel, Philippe & Benny Moldovanu & Ennio Stacchetti, 1994. "How (not) to sell nuclear weapons," Discussion Paper Serie B 288, University of Bonn, Germany.
  3. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
  4. Armstrong, Mark, 2000. "Optimal Multi-object Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 455-81, July.
  5. repec:wop:humbsf:2000-72 is not listed on IDEAS
  6. Dana, James Jr. & Spier, Kathryn E., 1994. "Designing a private industry : Government auctions with endogenous market structure," Journal of Public Economics, Elsevier, vol. 53(1), pages 127-147, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Todd R. Kaplan & Shmuel Zamir, 2014. "Advances in Auctions," Discussion Paper Series dp662, The Center for the Study of Rationality, Hebrew University, Jerusalem.
  2. Jehiel, Philippe & Moldovanu, Benny, 2006. "Allocative and Informational Externalities in Auctions and Related Mechanisms," CEPR Discussion Papers 5558, C.E.P.R. Discussion Papers.
  3. Kumru, Cagri & Yektas, Hadi, 2008. "Optimal Multi-Object Auctions with Risk Averse Buyers," MPRA Paper 7575, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ecm:latm04:287. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.