Simultaneous auctions without complements are (almost) efficient

Michal Feldman, Hu Fu, Nick Gravin and Brendan Lucier

Games and Economic Behavior, 2020, vol. 123, issue C, 327-341

Abstract: A simultaneous item auction is a simple procedure for allocating multiple indivisible goods to a set of bidders. In a simultaneous auction, every bidder submits bids on all items simultaneously. The allocation and prices are then resolved for each item separately, based solely on the bids submitted on that item. Such procedures are similar to auctions used in practice (e.g. eBay) but are not incentive compatible. We study the efficiency of Bayesian Nash equilibrium (BNE) outcomes of simultaneous first- and second-price auctions when bidders have complement-free (a.k.a. subadditive) valuations. We show that the expected social welfare of any BNE is at least 12 of the optimal social welfare in the case of first-price auctions, and at least 14 in the case of second-price auctions.

Keywords: Auctions; Allocative efficiency; Cost-benefit analysis noncooperative games asymmetric and private information; Mechanism design (search for similar items in EconPapers)
JEL-codes: C72 D44 D61 D82 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:123:y:2020:i:c:p:327-341

DOI: 10.1016/j.geb.2015.11.009

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