The second-price auction solves King Solomon's dilemma
Consider the problem of allocating k identical, indivisible objects among n agents, where k is less than n. The planner's objective is to give the objects to the top k valuation agents at zero costs to the planner and the agents. Each agent knows her own valuation of the object and whether it is among the top k. Modify the (k+1)st-price sealed-bid auction by introducing a small participation fee and the option not to participate in it. This strikingly simple mechanism (modified auction) implements the desired outcome in iteratively weakly undominated strategies. Moreover, no pair of agents can profitably deviate from the equilibrium by coordinating their strategies or bribing each other.
|Date of creation:||May 2008|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Perry, Motty & Reny, Philip J., 1999.
"A General Solution to King Solomon's Dilemma,"
Games and Economic Behavior,
Elsevier, vol. 26(2), pages 279-285, January.
- Perry, M. & Reny, P.J., 1995. "A General Solution to King Solomon's Dilemma," Papers 9581, Tilburg - Center for Economic Research.
- Perry, M. & Reny, P.J., 1995. "A general solution to king Solomon's dilemma," Discussion Paper 1995-81, Tilburg University, Center for Economic Research.
- Bag, Parimal Kanti & Sabourian, Hamid, 2005. "Distributing awards efficiently: More on King Solomon's problem," Games and Economic Behavior, Elsevier, vol. 53(1), pages 43-58, October.
- Bag, P.K. & Sabourian, H., 2004. "Distributing Awards Efficiently: More on King Solomon’s Problem," Cambridge Working Papers in Economics 0418, Faculty of Economics, University of Cambridge.
- Parimal Kanti Bag; Hamid Sabourian, 2004. "Distributing Awards Efficiently: More on King Solomon's Problem," Econometric Society 2004 North American Summer Meetings 257, Econometric Society.
- Olszewski, Wojciech, 2003. "A simple and general solution to King Solomon's problem," Games and Economic Behavior, Elsevier, vol. 42(2), pages 315-318, February. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8801. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.