Choosing Wisely: The Natural Multi-Bidding Mechanism
Pérez-Castrillo and Wettstein (2002) propose a multi-bidding mechanism to determine a winner from a set of possible projects. The winning project is implemented and its surplus is shared among the agents. In the multi-bidding mechanism each agent announces a vector of bids, one for each possible project, that are constrained to sum up to zero. In addition, each agent chooses a favorite a object which is used as a tie-breaker if several projects receive the same highest aggregate bid. Since more desirable projects receive larger bids, it is natural to consider the multi-bidding mechanism without the announcement of favorite projects. We show that the merits of the multi-bidding mechanism appear not to be robust to this natural simplification. Specifically, a Nash equilibrium exists if and only if there are at least two individually optimal projects and all individually optimal projects are efficient.
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- David Pérez-Castrillo & David Wettstein, .
"Bidding For The Surplus: A Non-Cooperative Approach To The Shapley Value,"
UFAE and IAE Working Papers
461.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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- Róbert Veszteg, 2010.
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- Vidal-Puga, Juan & Bergantinos, Gustavo, 2003. "An implementation of the Owen value," Games and Economic Behavior, Elsevier, vol. 44(2), pages 412-427, August.
- David P�rez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
- Jehiel, Phillipe & Moldovanu, Benny & Stacchetti, E., 1997.
"Multidimensional Mechanism Design for Auctions with Externalities,"
Sonderforschungsbereich 504 Publications
97-04, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Jehiel, Philippe & Moldovanu, Benny & Stacchetti, Ennio, 1999. "Multidimensional Mechanism Design for Auctions with Externalities," Journal of Economic Theory, Elsevier, vol. 85(2), pages 258-293, April.
- Mutuswami, Suresh & Perez-Castrillo, David & Wettstein, David, 2004. "Bidding for the surplus: realizing efficient outcomes in economic environments," Games and Economic Behavior, Elsevier, vol. 48(1), pages 111-123, July.
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