Core-selecting auctions with incomplete information

Lawrence M. Ausubel () and Oleg Baranov ()
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Lawrence M. Ausubel: University of Maryland

International Journal of Game Theory, 2020, vol. 49, issue 1, No 11, 273 pages

Abstract: Abstract Core-selecting auctions were proposed as alternatives to the Vickrey–Clarke–Groves (VCG) mechanism for environments with complementarities. In this paper, we consider a simple incomplete-information model that allows correlations among bidders’ values. We perform a full equilibrium analysis of three core-selecting auction formats as applied to the “local-local-global” model. We show that seller revenues and efficiency from core-selecting auctions can improve as correlations among bidders’ values increase, producing outcomes that are closer to the true core than are the VCG outcomes. Thus, there may be a theoretical justification for policymakers to utilize core-selecting auctions rather than the VCG mechanism in certain environments.

Keywords: Core-selecting auction; Combinatorial auction; Vickrey auction; VCG mechanism; Spectrum auction (search for similar items in EconPapers)
JEL-codes: C72 D44 D47 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (22)

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DOI: 10.1007/s00182-019-00691-3

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