A New Payment Rule for Core-Selecting Package Auctions
AbstractWe propose a new, easy-to-implement, class of payment rules, “Reference Rules,” to make core-selecting package auctions more robust. Small, almost riskless, profitable deviations from “truthful bidding” are often easy for bidders to find under currently-used payment rules. Reference Rules perform better than existing rules on our marginal-incentive-to-deviate criterion, and are as robust as existing rules to large deviations. Other considerations, including fairness and comprehensibility, also support the use of Reference Rules.
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Bibliographic InfoPaper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2009-W11.
Length: 16 pages
Date of creation: 01 Sep 2009
Date of revision:
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Web page: http://www.nuff.ox.ac.uk/economics/
multi-object auction; core; combinatorial auction; package auction; core-selecting auction; Vickrey auction; Vickrey; simultaneous ascending auction; robust design.;
Other versions of this item:
- Aytek Erdil & Paul Klemperer, 2010. "A New Payment Rule for Core-Selecting Package Auctions," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 537-547, 04-05.
- Erdil, Aytek & Klemperer, Paul, 2009. "A New Payment Rule for Core-Selecting Package Auctions," CEPR Discussion Papers 7487, C.E.P.R. Discussion Papers.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
This paper has been announced in the following NEP Reports:
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