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An Efficient Multi-Item Dynamic Auction with Budget Constrained Bidders

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Abstract

An auctioneer wishes to sell several heterogeneous indivisible items to a group of potential bidders. Each bidder has valuations over the items but might face a budget constraint and may therefore not be able to pay up to his values. In such markets, a competitive equilibrium typically fails to exist. We develop a novel dynamic auction and prove that the auction always ï¬ nds a core allocation. The core allocation consists of an assignment of the items and its associated supporting price vector and is Pareto efficient.

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  • Dolf Talman & Zaifu Yang, 2013. "An Efficient Multi-Item Dynamic Auction with Budget Constrained Bidders," Discussion Papers 13/31, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:13/31
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    Cited by:

    1. Zhou, Yu, 2017. "A multi-item auction with budget-constrained bidders and price controls," Economics Letters, Elsevier, vol. 155(C), pages 76-79.
    2. Gerard van der Laan & Zaifu Yang, 2016. "An ascending multi-item auction with financially constrained bidders," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 1(1), pages 109-149, December.
    3. Gerard van der Laan & Dolf Talman & Zaifu Yang, 2018. "Equilibrium in the Assignment Market under Budget Constraints," Discussion Papers 18/17, Department of Economics, University of York.
    4. Jianxin Rong & Ning Sun & Dazhong Wang, 2019. "A New Evaluation Criterion for Allocation Mechanisms with Application to Vehicle License Allocations in China," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 4(1), pages 39-86, November.
    5. A. Talman & Zaifu Yang, 2015. "An efficient multi-item dynamic auction with budget constrained bidders," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(3), pages 769-784, August.
    6. P. Jean‐Jacques Herings & Yu Zhou, 2022. "Competitive Equilibria In Matching Models With Financial Constraints," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(2), pages 777-802, May.
    7. Andrew MACKENZIE & Yu ZHOU, 2022. "Tract Housing, The Core, And Pendulum Auctions," Discussion papers e-22-005, Graduate School of Economics , Kyoto University.
    8. Zaifu Yang & Jingsheng Yu, 2018. "Efficient Ascending Menu Auctions with Budget Constrained Bidders," Discussion Papers 18/09, Department of Economics, University of York.

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    More about this item

    Keywords

    Dynamic auction; multi-item auction; budget constraint; core; efficiency;
    All these keywords.

    JEL classification:

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

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