Multi-object auction design beyond quasi-linearity: Leading examples

Yu Zhou and Shigehiro Serizawa

Games and Economic Behavior, 2023, vol. 140, issue C, 210-228

Abstract: In multi-object auction models with unit demand agents, two standard assumptions are the quasi-linearity of utility functions and the coincidence between price increment and valuation unit. Under these assumptions, the exact ascending auction of Demange et al. (1986), the sealed-bid Vickrey auction, as well as the approximate ascending auction of Demange et al. (1986) identify the minimum price equilibrium (MPE) while elegantly exhibiting efficiency and incentive-compatibility. We demonstrate that these auctions fail to identify the MPEs and are substantially inefficient and manipulable if these assumptions are dropped. We also discuss the implications of our negative results for multi-object auction models with multi-unit demand and matching with contracts models.

Keywords: Multi-object auction; Minimum price equilibrium; Examples; The coincidence assumption; Quasi-linearity (search for similar items in EconPapers)
JEL-codes: C78 D44 D74 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:140:y:2023:i:c:p:210-228

DOI: 10.1016/j.geb.2023.03.011

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