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Assignment Messages and Exchanges

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  • Paul Milgrom

    (Stanford University)

Abstract

“Assignment messages” are messages that parameterize substitutable preferences using a particular linear program. An “assignment exchange” is a simplified Walrasian exchange in which participants are restricted to report only assignment messages. Any pure Nash or e-Nash equilibrium of the simplified mechanism is a Nash or e-Nash equilibrium of the Walrasian mechanism before simplification. With a further restriction to basic assignment messages, the exchange yields integer-valued allocations, thus generalizing the Shapley-Shubik assignment mechanism. Connections are reported between assignment exchanges and ascending multi-product clock auctions, double auctions for a single product, and Vickrey auctions. Applications include some cases of Leontieff complements.

Suggested Citation

  • Paul Milgrom, 2008. "Assignment Messages and Exchanges," Discussion Papers 08-014, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:08-014
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    References listed on IDEAS

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    More about this item

    Keywords

    mechanism design; market design; auctions; Shapley-Shubik;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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