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Strategy-proof multi-object mechanism design: Ex-post revenue maximization with non-quasilinear preferences

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  • Kazumura, Tomoya
  • Mishra, Debasis
  • Serizawa, Shigehiro

Abstract

A seller is selling multiple objects to a set of agents, who can buy at most one object. Each agent's preference over (object, payment) pairs need not be quasilinear. The seller considers the following desiderata for her mechanism, which she terms desirable: (1) strategy-proofness, (2) ex-post individual rationality, (3) equal treatment of equals, (4) no wastage (every object is allocated to some agent). The minimum Walrasian equilibrium price (MWEP) mechanism is desirable. We show that at each preference profile, the MWEP mechanism generates more revenue for the seller than any desirable mechanism satisfying no subsidy. Our result works for the quasilinear domain, where the MWEP mechanism is the VCG mechanism, and for various non-quasilinear domains, some of which incorporate positive income effect of agents. We can relax no subsidy to no bankruptcy in our result for certain domains with positive income effect.

Suggested Citation

  • Kazumura, Tomoya & Mishra, Debasis & Serizawa, Shigehiro, 2020. "Strategy-proof multi-object mechanism design: Ex-post revenue maximization with non-quasilinear preferences," Journal of Economic Theory, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:jetheo:v:188:y:2020:i:c:s0022053118305866
    DOI: 10.1016/j.jet.2020.105036
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    Cited by:

    1. Yuya Wakabayashi & Ryosuke Sakai & Shigehiro Serizawa, 2022. "A Characterization of the Minimum Price Walrasian Rule with Reserve Prices for an Arbitrary Number of Agents and Objects," ISER Discussion Paper 1161, Institute of Social and Economic Research, Osaka University.
    2. Zhou, Yu & Serizawa, Shigehiro, 2023. "Multi-object auction design beyond quasi-linearity: Leading examples," Games and Economic Behavior, Elsevier, vol. 140(C), pages 210-228.
    3. Yu Zhou & Shigehiro Serizawa, 2020. "Serial Vickrey Mechanism," ISER Discussion Paper 1095, Institute of Social and Economic Research, Osaka University.
    4. Di Feng, 2023. "Efficiency in Multiple-Type Housing Markets," Papers 2308.14989, arXiv.org, revised Dec 2023.
    5. Bando, Keisuke & Kawasaki, Ryo, 2021. "Stability properties of the core in a generalized assignment problem," Games and Economic Behavior, Elsevier, vol. 130(C), pages 211-223.
    6. Kazumura, Tomoya & Mishra, Debasis & Serizawa, Shigehiro, 2020. "Strategy-proof multi-object mechanism design: Ex-post revenue maximization with non-quasilinear preferences," Journal of Economic Theory, Elsevier, vol. 188(C).
    7. Kazumura, Tomoya & Mishra, Debasis & Serizawa, Shigehiro, 2020. "Mechanism design without quasilinearity," Theoretical Economics, Econometric Society, vol. 15(2), May.
    8. Ryosuke Sakai & Shigehiro Serizawa, 2020. "Strategy-proof mechanism design with non-quasilinear preferences: Ex-post revenue maximization for an arbitrary number of objects," ISER Discussion Paper 1107, Institute of Social and Economic Research, Osaka University.
    9. Yu Zhou & Shigehiro Serizawa, 2021. "Multi-object Auction Design Beyond Quasi-linearity: Leading Examples," ISER Discussion Paper 1116r, Institute of Social and Economic Research, Osaka University, revised Nov 2022.
    10. Hiroki Shinozaki, 2022. "Egalitarian-Equivalence and Strategy-Proofness in the Object Allocation Problem with Non-Quasi-Linear Preferences," Games, MDPI, vol. 13(6), pages 1-24, November.
    11. Malik, Komal & Mishra, Debasis, 2021. "Pareto efficient combinatorial auctions: Dichotomous preferences without quasilinearity," Journal of Economic Theory, Elsevier, vol. 191(C).
    12. Yu Zhou & Shigehiro Serizawa, 2021. "Multi-object Auction Design Beyond Quasi-linearity: Leading Examples," ISER Discussion Paper 1116, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    Multi-object auction; Strategy-proofness; Ex-post revenue maximization; Minimum Walrasian equilibrium price mechanism; Non-quasilinear preferences;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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