Efficient multi-unit auctions for normal goods

Brian Baisa ()

Theoretical Economics, 2020, vol. 15, issue 1

Abstract: I study multi-unit auction design when bidders have private values, multi-unit demands, and non-quasilinear preferences. Without quasilinearity, the Vickrey auction loses its desired incentive and efficiency properties. I give conditions under which we can design a mechanism that retains the Vickrey auction’s desirable incentive and efficiency properties: (1) individual rationality, (2) dominant strategy incentive compatibility, and (3) Pareto efficiency. I show that there is a mechanism that retains the desired properties of the Vickrey auction if there are two bidders who have single-dimensional types. I also present an impossibility theorem that shows that there is no mechanism that satisfies Vickrey’s desired properties and weak budget balance when bidders have multi-dimensional types.

Keywords: Multi-unit auctions; multi-dimensional mechanism design; wealth effects (search for similar items in EconPapers)
JEL-codes: D44 D47 D61 D82 (search for similar items in EconPapers)
Date: 2020-02-03
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Citations: View citations in EconPapers (14)

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