First-price auctions on general preference domains: axiomatic characterizations

Tsuyoshi Adachi () and Takumi Kongo ()
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Tsuyoshi Adachi: Waseda University
Takumi Kongo: Fukuoka University

Economic Theory Bulletin, 2013, vol. 1, issue 1, No 10, 93-103

Abstract: Abstract In a single-item auction with agents having general preferences, first-price auctions are axiomatically characterized. In this study, we characterize first-price auctions by Pareto efficiency, individual rationality, anonymity in welfare, and non-bossiness in welfare. The first three properties are satisfied by second-price auctions. Considering the well-known fact that second-price auctions are strategy-proof, a clear distinction between first- and second-price auctions is reducible to the difference between non-bossiness and strategy-proofness, both of which are important properties with respect to agents’ strategic behavior. In the characterization, anonymity in welfare can be replaced by envy-freeness, which is also a basic property related to equity among agents. Furthermore, in our characterization, each of the properties, Pareto efficiency, individual rationality, and non-bossiness in welfare, is independent, and domains on which first-price auctions are characterized without equity properties are specified. By strengthening non-bossiness, we characterize first-price auctions by a weaker equity property called equal welfare to equals.

Keywords: First-price auction; Axiomatic characterization; General preference; Non-bossiness; Equity (search for similar items in EconPapers)
JEL-codes: D44 D63 D82 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40505-013-0001-9

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