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Generalized reduced-form auctions: a network-flow approach


  • Yeon-Koo Che
  • Jinwoo Kim
  • Konrad Mierendorff


We develop a network-flow approach for characterizing interim-allocation rules that can be implemented by ex post allocations. Our method can be used to characterize feasible interim allocations in general multi-unit auctions where agents face capacity constraints, both ceilings and floors. Applications include a variety of settings of practical interest, ranging from individual and group-specific capacity constraints, set-aside sale, partnership dissolution, and government license reallocation.

Suggested Citation

  • Yeon-Koo Che & Jinwoo Kim & Konrad Mierendorff, 2011. "Generalized reduced-form auctions: a network-flow approach," ECON - Working Papers 031, Department of Economics - University of Zurich, revised Mar 2013.
  • Handle: RePEc:zur:econwp:031

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    References listed on IDEAS

    1. Sandro Brusco & Giuseppe Lopomo, 2002. "Collusion via Signalling in Simultaneous Ascending Bid Auctions with Heterogeneous Objects, with and without Complementarities," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 407-436.
    2. David J. Salant, 1997. "Up in the Air: GTE's Experience in the MTA Auction for Personal Communication Services Licenses," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(3), pages 549-572, September.
    3. Yeon-Koo Che & Wouter Dessein & Navin Kartik, 2013. "Pandering to Persuade," American Economic Review, American Economic Association, vol. 103(1), pages 47-79, February.
    4. Miralles, Antonio, 2012. "Cardinal Bayesian allocation mechanisms without transfers," Journal of Economic Theory, Elsevier, vol. 147(1), pages 179-206.
    5. John Asker & Estelle Cantillon, 2010. "Procurement when price and quality matter," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 1-34.
    6. Mark Armstrong, 2000. "Optimal Multi-Object Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 455-481.
    7. Parlane, S., 1998. "Contracting with Capacity Constrained Suppliers," Papers 98/4, College Dublin, Department of Political Economy-.
    8. Alex Gershkov & Benny Moldovanu & Xianwen Shi, 2011. "Bayesian and Dominant Strategy Implementation Revisited," Working Papers tecipa-422, University of Toronto, Department of Economics.
    9. McAfee, R Preston & McMillan, John, 1992. "Bidding Rings," American Economic Review, American Economic Association, vol. 82(3), pages 579-599, June.
      • McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
    10. Matthews, Steven A, 1984. "On the Implementability of Reduced Form Auctions," Econometrica, Econometric Society, vol. 52(6), pages 1519-1522, November.
    11. Alejandro M. Manelli & Daniel R. Vincent, 2010. "Bayesian and Dominant‐Strategy Implementation in the Independent Private‐Values Model," Econometrica, Econometric Society, vol. 78(6), pages 1905-1938, November.
    12. Mallesh M. Pai & Rakesh Vohra, 2008. "Optimal Auctions with Financially Constrained Bidders," Discussion Papers 1471, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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    Cited by:

    1. Goeree, Jacob K. & Kushnir, Alexey, 2016. "Reduced form implementation for environments with value interdependencies," Games and Economic Behavior, Elsevier, vol. 99(C), pages 250-256.
    2. Tomoya Kazumura & Debasis Mishra & Shigehiro Serizawa, 2017. "Strategy-proof multi-object auction design: Ex-post revenue maximization with no wastage," ISER Discussion Paper 1001, Institute of Social and Economic Research, Osaka University.
    3. Sergiu Hart & Philip J. Reny, 2015. "Implementation of reduced form mechanisms: a simple approach and a new characterization," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(1), pages 1-8, April.
    4. Pai, Mallesh M. & Vohra, Rakesh, 2014. "Optimal auctions with financially constrained buyers," Journal of Economic Theory, Elsevier, vol. 150(C), pages 383-425.
    5. Tim Roughgarden, 2018. "Complexity Theory, Game Theory, and Economics," Papers 1801.00734,
    6. Alison Watts, 2016. "Two ways to auction off an uncertain good," Journal of Economics, Springer, vol. 119(1), pages 1-15, September.
    7. Tayfun Sönmez & M. Utku Ünver, 2015. "Enhancing the Efficiency of and Equity in Transplant Organ Allocation via Incentivized Exchange," Boston College Working Papers in Economics 868, Boston College Department of Economics.

    More about this item


    Reduced-form auctions; network-flow approach; feasible circulation flow; paramodular capacity constraints;

    JEL classification:

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

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