Shutting-out-proofness in object allocation problems with money

Hiroki Shinozaki

No HIAS-E-138, Discussion paper series from Hitotsubashi Institute for Advanced Study, Hitotsubashi University

Abstract: We study the problem of allocating heterogeneous objects to agents with money. Each agent can receive several objects and has a quasi-linear utility function. The owner of the objects is only interested in his revenue from an allocation. An (allocation) rule is shutting-out-proof if no group of agents together with the owner ever benefits from shutting out other groups of agents and arranging payments among themselves. We show that on any domain that includes all the additive valuation functions, a Vickrey rule satisfies shutting-out-proofness if and only if all the valuation functions in the domain satisfy the substitutes condition (Kelso and Crawford, 1982). Our result sheds a new light on the relationship between the desirable properties of a Vickrey rule and the substitutes condition (Ausubel and Milgrom, 2002; Milgrom, 2004).

Keywords: Shutting-out-proofness; Collusion; Vickrey rules; Substitutes condition; Combinatorial auctions (search for similar items in EconPapers)
JEL-codes: D44 D47 D71 D82 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2024-02-13
New Economics Papers: this item is included in nep-mic and nep-upt
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