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A Dynamic Mechanism Design with Overbooking, Different Deadlines, and Multi-unit Demands

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Listed:
  • Ryuji Sano

    (Institute of Economic Research, Kyoto University)

Abstract

This paper considers a dynamic mechanism design in which multiple objects with different consumption deadlines are allocated over time. Agents arrive over time and may have multi-unit demand. We characterize necessary and sufficient condition for periodic ex-post incentive compatibility and provide the optimal mechanism that maximizes the seller's expected revenue under regularity conditions. When complete contingent-contracts are available, the optimal mechanism can be interpreted as an "overbooking" mechanism. The seller utilizes overbooking for screening and price-discriminating advance agents. When agents demand multiple objects as complements, the seller may face a tradeoff between the last-minute price of the current object and the future profit.

Suggested Citation

  • Ryuji Sano, 2017. "A Dynamic Mechanism Design with Overbooking, Different Deadlines, and Multi-unit Demands," KIER Working Papers 963, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:963
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP963.pdf
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    References listed on IDEAS

    as
    1. Alex Gershkov & Benny Moldovanu, 2009. "Dynamic Revenue Maximization with Heterogeneous Objects: A Mechanism Design Approach," American Economic Journal: Microeconomics, American Economic Association, vol. 1(2), pages 168-198, August.
    2. Said, Maher, 2012. "Auctions with dynamic populations: Efficiency and revenue maximization," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2419-2438.
    3. Alessandro Pavan & Ilya Segal & Juuso Toikka, 2014. "Dynamic Mechanism Design: A Myersonian Approach," Econometrica, Econometric Society, vol. 82(2), pages 601-653, March.
    4. Péter Eső & Balázs Szentes, 2007. "Optimal Information Disclosure in Auctions and the Handicap Auction," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 705-731.
    5. , & , & ,, 2011. "Revenue maximization in the dynamic knapsack problem," Theoretical Economics, Econometric Society, vol. 6(2), May.
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    More about this item

    Keywords

    dynamic mechanism design; optimal auction; overbooking; price discrimination; revenue management;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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