Optimal Multiunit Exchange Design
AbstractWe investigate multiunit exchange where a central planner and participants both bring commodities to sell and the central planner plays the role of platform provider. The central planner has restrictions on allocations. We characterize the optimal mechanism concerning his (her) revenue under incentive compatibility and individual rationality in the ex-post term. We introduce modified virtual valuation and show that the optimization problem can be replaced with the maximization of modified virtual valuations. We apply our results to important problems of single-unit demands and position exchanges. We demonstrate a clock auction design that implements the optimal position allocation through dominant strategies.
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Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-853.
Length: 37 pages
Date of creation: May 2012
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- Fernando Branco, 1996. "Multiple unit auctions of an indivisible good," Economic Theory, Springer, vol. 8(1), pages 77-101.
- Susan Athey & Glenn Ellison, 2007.
"Position Auctions with Consumer Search,"
122247000000001633, UCLA Department of Economics.
- Armstrong, Mark, 2000. "Optimal Multi-object Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 455-81, July.
- Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007.
"Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords,"
American Economic Review,
American Economic Association, vol. 97(1), pages 242-259, March.
- Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2005. "Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords," NBER Working Papers 11765, National Bureau of Economic Research, Inc.
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