A New Payment Rule for Core-Selecting Package Auctions
We propose a new, easy-to-implement class of payment rules, "Reference Rules" to make core-selecting package auctions more robust. Small, almost-riskless, profitable deviations from "truthful bidding" are often easy for bidders to find under currently used payment rules. Reference Rules perform better than existing rules on our marginal-incentive-to-deviate criterion, and are as robust as existing rules to large deviations. Other considerations, including fairness and comprehensibility, also support the use of Reference Rules. (JEL: D44, C71) (c) 2010 by the European Economic Association.
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Volume (Year): 8 (2010)
Issue (Month): 2-3 (04-05)
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