Menu Auctions with Non-Transferable Utilities and Budget Constraints

Chiu Yu Ko

No 787, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper extends Bernheim and Whinston's (1986) menu auction model under transferable utilities to a framework with non-transferable utilities and budget constraints. Under appropriate definitions of equilibria, it is shown that every truthful Nash equilibrium (TNE) is a coalition-proof Nash equilibrium (CPNE) and that the set of TNE payoffs and the set of CPNE payoffs are equivalent, as in a transferable utility framework. The existence of a CPNE is assured in contrast with the possible non-existence of Nash equilibrium under the definition by Dixit, Grossman, and Helpman (1997). Moreover, the set of CPNE payoffs is equivalent to the bidder-optimal weak core.

Keywords: non-transferable utility; menu auction; coalition-proof Nash equilibrium; truthful Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D79 (search for similar items in EconPapers)
Date: 2011-10-20
New Economics Papers: this item is included in nep-cis, nep-gth, nep-mic and nep-upt
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:787

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