Contingent Auctions with Allocative Externalities: Vickrey vs. the Ausubel-Milgrom Proxy Auction
We introduce contingent auction mechanisms, which is a superset of combinatorial auctions, and where bidders submit bids on packages that are contingent on the whole final assignment. Without externalities, the Vickrey and the Ausubel-Milgrom Proxy Auction are both robust if items are perceived as substitutes. Such an equivalence between those formats may not hold with externalities and the analog of the substitute condition is a complex unexplored issue. We analyse those issues in the Negative Group-Dependent Externalities framework, a general structure with allocative externalities between joint-purchasers.
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