The condominium problem; auctions for substitutes
This paper considers the problem of designing selling procedures for substitutes (like condominium units). Oral, ascending auctions for the right to choose are efficient. This is a common type of auction used for the sale of real estate. Efficiency is not optimal from the seller’s viewpoint. An optimal procedure distorts the right-to-choose auction to favor in late rounds bidders whose preferred object has already been sold. This optimal auction is complex. A revenue improving departure from efficiency can be achieved by simply auctioning all the rights to choose before any of them is exerted. Copyright Springer-Verlag Berlin/Heidelberg 2005
Volume (Year): 9 (2005)
Issue (Month): 2 (04)
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