Choosing Wisely: The Natural Multi-Bidding Mechanism
AbstractPérez-Castrillo and Wettstein (2002) propose a multi-bidding mechanism to determine a winner from a set of possible projects. The winning project is implemented and its surplus is shared among the agents. In the multi-bidding mechanism each agent announces a vector of bids, one for each possible project, that are constrained to sum up to zero. In addition, each agent chooses a favorite a object which is used as a tie-breaker if several projects receive the same highest aggregate bid. Since more desirable projects receive larger bids, it is natural to consider the multi-bidding mechanism without the announcement of favorite projects. We show that the merits of the multi-bidding mechanism appear not to be robust to this natural simplification. Specifically, a Nash equilibrium exists if and only if there are at least two individually optimal projects and all individually optimal projects are efficient.
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Bibliographic InfoPaper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number 2005-14.
Length: 27 pages
Date of creation: 2005
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(natural) multi-bidding mechanism; existence; efficiency;
Other versions of this item:
- Lars Ehlers, 2009. "Choosing wisely: the natural multi-bidding mechanism," Economic Theory, Springer, vol. 39(3), pages 505-512, June.
- EHLERS, Lars, 2005. "Choosing Wisely: The Natural Multi-Bidding Mechanism," Cahiers de recherche 18-2005, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-27 (All new papers)
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.:
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