Large Auction Design in Dominance

Hitoshi Matsushima

No CARF-F-007, CARF F-Series from Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo

Abstract: This paper shows a detail-free idea of multi-object large double auction design in general trading environments, where the auctioneer randomly divides agents into two groups, and agents in each group trade at the market-clearing price vector in the other group. With private values, any dominant strategy profile mimics price-taking behavior, and the auctioneer achieves approximate efficiency. With interdependent values, any twice iteratively undominated strategy profile mimics fully revealing rational expectations equilibrium, and the auctioneer approximately achieves ex post efficiency. We need only a very weak common knowledge assumption on rationality.

Pages: 32 pages
Date: 2004-06
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Citations: View citations in EconPapers (3)

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Working Paper: Large Auction Design in Dominance (2004)
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