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Connected Price Dynamics with Revealed Preferences and Auctioneer's Discretion in VCG Combinatorial Auction

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  • Hitoshi Matsushima

    (Faculty of Economics, The University of Tokyo)

Abstract

We investigate a general class of dynamical open-bid combinatorial auction protocols termed price-demand procedures, where the auctioneer asks buyer-dependent price vectors and buyers reveal demand sets. Such revelations are easier to practice than the revelations of entire valuations at once. With revealed preference activity rule and connectedness, we characterize the class of all procedures that achieve the VCG outcome correctly. Since buyers can detect whether the auctioneer succeeds to achieve the VCG outcome just by observing the history, they can leave the selection of procedure the auctioneer’s discretion. The auctioneer can save irrelevant information leakage by selecting a signal-contingent shortcut.

Suggested Citation

  • Hitoshi Matsushima, 2015. "Connected Price Dynamics with Revealed Preferences and Auctioneer's Discretion in VCG Combinatorial Auction," CIRJE F-Series CIRJE-F-960, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2015cf960
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    References listed on IDEAS

    as
    1. Mishra, Debasis & Parkes, David C., 2007. "Ascending price Vickrey auctions for general valuations," Journal of Economic Theory, Elsevier, vol. 132(1), pages 335-366, January.
    2. Hitoshi Matsushima, 2011. "Price-Based Combinatorial Auction: Connectedness and Representative Valuations," CARF F-Series CARF-F-261, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    3. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    4. Lawrence M. Ausubel, 2004. "An Efficient Ascending-Bid Auction for Multiple Objects," American Economic Review, American Economic Association, vol. 94(5), pages 1452-1475, December.
    5. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
    6. Peter Cramton & Yoav Shoham & Richard Steinberg (ed.), 2006. "Combinatorial Auctions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033429, April.
    7. Chen, Yan & Takeuchi, Kan, 2010. "Multi-object auctions with package bidding: An experimental comparison of Vickrey and iBEA," Games and Economic Behavior, Elsevier, vol. 68(2), pages 557-579, March.
    8. Bikhchandani, Sushil & Ostroy, Joseph M., 2002. "The Package Assignment Model," Journal of Economic Theory, Elsevier, vol. 107(2), pages 377-406, December.
    9. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, October.
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    More about this item

    Keywords

    Combinatorial Auctions; Price-Demand Procedures; VCG Mechanisms; Revealed Preference Activity Rule; Connectedness; Representative Valuation Functions. --;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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