The Dynamic Vickrey Auction

Konrad Mierendorff

Games and Economic Behavior, 2013, vol. 82, issue C, 192-204

Abstract: We study the efficient allocation of a single object over a finite time horizon. Buyers arrive randomly over time, are long-lived, and have independent private values. The valuation of a buyer may depend on the time of the allocation in an arbitrary way. We construct an incentive compatible mechanism in which (A) there is a single financial transaction (with the buyer), (B) ex-post participation constraints are fulfilled, (C) there is no positive transfer to any agent and (D) payments are determined online. We exploit that under the efficient allocation rule, there is a unique potential winning period for each buyer. This reduces the multidimensional type to one dimension and the payment of the winner can be defined as the lowest valuation for the potential winning period, with which the buyer would have won the object. In a static model, this payment rule coincides with the payment rule of the Vickrey Auction.

Keywords: Dynamic allocation problem; Efficiency; Auction; Multidimensional types (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:82:y:2013:i:c:p:192-204

DOI: 10.1016/j.geb.2013.07.004

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