Substitute Valuations, Auctions, and Equilibrium with Discrete Goods
AbstractFor economies in which goods are available in several (discrete) units, this paper identifies two notions of substitutes. The weaker notion guarantees monotonicity of tatonnement processses and convergence of clock auctions to a pseudo-equilibrium, but only the stronger notion, which treats each unit traded as a distinct good with its own price, guarantees that every pseudo-equilibrium is a Walrasian equilibrium, the Vickrey outcome is in the core, and the law of aggregate demand is satisfied. The paper provides several characterizations and properties of weak and strong substitutes.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 339.
Date of creation: 01 Aug 2007
Date of revision:
Substitute Valuation; Auction; Discrete Goods; Nonlinear Price; Submodular Dual; Walrasian Equilibrium; Pseudo-Equilibrium; Law of Aggregate Demand; Vickrey Auction;
Other versions of this item:
- Paul Milgrom & Bruno Strulovici, 2006. "Substitute Valuations, Auctions and Equilibrium with Discrete Goods," Levine's Bibliography 321307000000000713, UCLA Department of Economics.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
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