 First price package auction with many tradersJournal of Mathematical Economics, 2017, vol. 69, issue C, 71-83 Abstract: This paper studies a first price package auction in which multiple sellers participate in addition to multiple buyers. We generalize the notion of the profit-target strategy which is first introduced as a truthful strategy in a first price package auction with a single seller by Bernheim and Whinston (1986b). We then show that the set of equilibrium payoffs in profit-target strategies is equal to the bidder-optimal core, and is also equal to the set of coalition-proof Nash equilibria. Using this result, we find that any equilibrium payoff vector is weakly Pareto-dominated by the VCG payoff vector for buyers, and that the Walrasian competitive equilibrium payoff vector is weakly Pareto-dominated by some equilibrium payoff vector for buyers, even if goods are substitutes. This contrasts with the first price package auction with a single seller, in which it is shown that if goods are substitutes, then those three outcomes are payoff-equivalent. Keywords: Package auction; Bidder optimal core; VCG outcome; Walrasian pricing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:69:y:2017:i:c:p:71-83 DOI: 10.1016/j.jmateco.2017.01.001 Access Statistics for this article Journal of Mathematical Economics is currently edited by Atsushi (A.) Kajii More articles in Journal of Mathematical Economics from Elsevier |
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