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Optimal Multiunit Exchange Design


  • Hitoshi Matsushima

    (Faculty of Economics, University of Tokyo)


We investigate multiunit exchange where a central planner and participants both bring commodities to sell and the central planner plays the role of platform provider. The central planner has restrictions on allocations. We characterize the optimal mechanism concerning his (her) revenue under incentive compatibility and individual rationality in the ex-post term. We introduce modified virtual valuation and show that the optimization problem can be replaced with the maximization of modified virtual valuations. We apply our results to important problems of single-unit demands and position exchanges. We demonstrate a clock auction design that implements the optimal position allocation through dominant strategies.

Suggested Citation

  • Hitoshi Matsushima, 2012. "Optimal Multiunit Exchange Design," CIRJE F-Series CIRJE-F-853, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2012cf853

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    References listed on IDEAS

    1. Susan Athey & Glenn Ellison, 2011. "Position Auctions with Consumer Search," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1213-1270.
    2. Fernando Branco, 1996. "Multiple unit auctions of an indivisible good," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 77-101.
    3. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007. "Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords," American Economic Review, American Economic Association, vol. 97(1), pages 242-259, March.
    4. Mark Armstrong, 2000. "Optimal Multi-Object Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 455-481.
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    Cited by:

    1. Hitoshi Matsushima, 2015. "Optimal Mechanism Design: Type-Independent Preference Orderings," CARF F-Series CARF-F-357, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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