Connected Price Dynamics with Revealed Preferences and Auctioneer’s Discretion in VCG Combinatorial Auction

Hitoshi Matsushima

The B.E. Journal of Theoretical Economics, 2018, vol. 18, issue 1, 16

Abstract: We investigate open-bid protocols termed price-demand procedures in combinatorial auction problems. Instead of requiring buyers to reveal their entire valuation functions directly, the auctioneer gradually gathers information by offering price vectors and requiring demand responses to each buyer. The auctioneer continues to calculate the ‘provisional’ profile of valuation functions in a history-dependent manner and check whether the efficient allocations with and without any single buyer for this profile are revealed in the resultant history. Once these are revealed, the auctioneer ends the procedure and determines the VCG outcome associated with the provisional profile at the ending time. With the assumptions of revealed preference activity rule and connectedness, this paper shows that the VCG outcome associated with the provisional profile at the ending time is always the same as that associated with the true profile, even though the provisional profile is generally different from the true one. Only our procedures can achieve the correct VCG outcome. We further discuss the auctioneer’s discretion and buyers’ privacy concern.

Keywords: combinatorial auctions; price-demand procedures; VCG mechanisms; revealed preference activity rule; connectedness; provisional valuation functions (search for similar items in EconPapers)
JEL-codes: D44 D47 D61 D82 D86 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejte-2016-0168 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:18:y:2018:i:1:p:16:n:19

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejte/html

DOI: 10.1515/bejte-2016-0168

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().