An Efficient and Incentive Compatible Dynamic Auction for Multiple Complements
This article proposes an efficient and incentive compatible dynamic auction for selling multiple complementary goods to finitely many bidders. The goods are traded in discrete quantities. The seller has a reserve price for every bundle of goods and determines which bundles to sell based on prevailing prices. The auctioneer announces a current price for every bundle of goods and a supply set of goods, every bidder subsequently responds with a set of goods demanded at these prices, and then the auctioneer adjusts prices. We prove that even when bidders can exercise their market power strategically, this dynamic auction always induces them to bid truthfully as price-takers, resulting in an efficient allocation, its supporting Walrasian equilibrium price for every bundle of goods, and a generalized Vickrey-Clarke-Groves payment for every bidder.
|Date of creation:||May 2014|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
More information through EDIRC
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.:
- Paul Klemperer, 2004.
"Auctions: Theory and Practice,"
2004-W09, Economics Group, Nuffield College, University of Oxford.
- Aytek Erdil & Paul Klemperer, 2009.
"A New Payment Rule for Core-Selecting Package Auctions,"
2009-W11, Economics Group, Nuffield College, University of Oxford.
- Aytek Erdil & Paul Klemperer, 2010. "A New Payment Rule for Core-Selecting Package Auctions," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 537-547, 04-05.
- Erdil, Aytek & Klemperer, Paul, 2009. "A New Payment Rule for Core-Selecting Package Auctions," CEPR Discussion Papers 7487, C.E.P.R. Discussion Papers.
- Paul Klemperer & Aytek Erdil, 2009. "A New Payment Rule for Core-Selecting Package Auctions," Economics Series Working Papers 2009-W11, University of Oxford, Department of Economics.
- Lawrence Ausubel & Peter Cramton, 2004.
"Vickrey auctions with reserve pricing,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 493-505, March.
- Ausubel Lawrence M & Milgrom Paul R, 2002.
"Ascending Auctions with Package Bidding,"
The B.E. Journal of Theoretical Economics,
De Gruyter, vol. 1(1), pages 1-44, August.
- Carmen Beviá Baeza & José Angel Silva Reus, 1997.
"Buying several indivisible goods,"
Working Papers. Serie AD
1997-27, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Carmen Bevia & Martine Quinzii & JosŽ A. Silva, . "Buying Several Indivisible Goods," Department of Economics 97-20, California Davis - Department of Economics.
- Martine Quinzii & Carmen Bevia & JosÅ A. Silva, 2003. "Buying Several Indivisible Goods," Working Papers 9720, University of California, Davis, Department of Economics.
- 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.
- Ning Sun & Zaifu Yang, 2009. "A Double-Track Adjustment Process for Discrete Markets With Substitutes and Complements," Econometrica, Econometric Society, vol. 77(3), pages 933-952, 05.
- Michael Ostrovsky, 2008. "Stability in Supply Chain Networks," American Economic Review, American Economic Association, vol. 98(3), pages 897-923, June.
- S.J. Rassenti & V.L. Smith & R.L. Bulfin, 1982. "A Combinatorial Auction Mechanism for Airport Time Slot Allocation," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 402-417, Autumn.
- Rothkopf, Michael H & Teisberg, Thomas J & Kahn, Edward P, 1990. "Why Are Vickrey Auctions Rare?," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 94-109, February.
- Ning Sun & Zaifu Yang, 2006. "Equilibria and Indivisibilities: Gross Substitutes and Complements," Econometrica, Econometric Society, vol. 74(5), pages 1385-1402, 09.
- Paul Milgrom & Robert J. Weber, 1981.
"A Theory of Auctions and Competitive Bidding,"
447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Milgrom, Paul, 1998.
"Putting auction theory to work : the simultaneous ascending auction,"
Policy Research Working Paper Series
1986, The World Bank.
- Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April.
- Paul Milgrom, . "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Working Papers 98002, Stanford University, Department of Economics.
- Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
- Robert Day & Paul Milgrom, 2008. "Core-selecting package auctions," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 393-407, March.
- Levin, Jonathan, 1997. "An Optimal Auction for Complements," Games and Economic Behavior, Elsevier, vol. 18(2), pages 176-192, February.
- Paul Klemperer, 2004. "Introduction to Auctions: Theory and Practice," Introductory Chapters, in: Auctions: Theory and Practice Princeton University Press.
- Milgrom,Paul, 2004.
"Putting Auction Theory to Work,"
Cambridge University Press, number 9780521551847, November.
- Paul Milgrom, 2007. "Package Auctions and Exchanges," Econometrica, Econometric Society, vol. 75(4), pages 935-965, 07.
- Ning Sun & Zaifu Yang, 2008. "A Double-Track Auction for Substitutes and Complements," KIER Working Papers 656, Kyoto University, Institute of Economic Research.
- Hurwicz, Leonid, 1973. "The Design of Mechanisms for Resource Allocation," American Economic Review, American Economic Association, vol. 63(2), pages 1-30, May.
- Bikhchandani, Sushil & Ostroy, Joseph M., 2002. "The Package Assignment Model," Journal of Economic Theory, Elsevier, vol. 107(2), pages 377-406, December.
- Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, vol. 53(2), pages 345-61, March.
- Makowski, Louis, 1979. "Value theory with personalized trading," Journal of Economic Theory, Elsevier, vol. 20(2), pages 194-212, April.
When requesting a correction, please mention this item's handle: RePEc:yor:yorken:14/06. 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: (Paul Hodgson)
If references are entirely missing, you can add them using this form.