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An Extension of Ausubel's Auction for Heterogeneous Discrete Goods

Author

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  • Hakan Inal

    (Department of Economics, VCU School of Business & Center for Public Policy, L. Douglas Wilder School of Government and Public Affairs)

Abstract

Ausubel's dynamic private-values auction for heterogeneous discrete goods, Ausubel (2006), yields an efficient equilibrium outcome but it is designed for a limited class of environments. If bidders' values for bundles of goods are not integers, then the auction mechanism may not yield an efficient allocation without any information on bidders' values. In this paper, I extend Ausubel's auction for heterogeneous discrete goods to real-valued quasilinear utility functions. The mechanism I propose reaches a Walrasian equilibrium price vector in finite "steps" without any additional information on bidders' values. In the extension of Ausubel's auction, truthful bidding constitutes an efficient equilibrium.

Suggested Citation

  • Hakan Inal, 2010. "An Extension of Ausubel's Auction for Heterogeneous Discrete Goods," Working Papers 1005, VCU School of Business, Department of Economics.
  • Handle: RePEc:vcu:wpaper:1005
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    More about this item

    Keywords

    Auctions; Ausubel auction; heterogeneous goods; discrete goods; price adjustment; tatonnement.;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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