A New Payment Rule for Core-Selecting Package Auctions

Paul Klemperer and Aytek Erdil

No 7487, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We propose a new, easy-to-implement, class of payment rules, "Reference Rules," to make core-selecting package auctions more robust. Small, almost riskless, profitable deviations from "truthful bidding" are often easy for bidders to find under currently-used payment rules. Reference Rules perform better than existing rules on our marginal-incentive-to-deviate criterion, and are as robust as existing rules to large deviations. Other considerations, including fairness and comprehensibility, also support the use of Reference Rules.

Keywords: Combinatorial auction; Core; Core-selecting auction; Multi-object auction; Package auction; Robust design; Simultaneous ascending auction; Vickrey; Vickrey auction (search for similar items in EconPapers)
JEL-codes: C71 D44 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: A New Payment Rule for Core-Selecting Package Auctions (2010)
Working Paper: A New Payment Rule for Core-Selecting Package Auctions (2009)
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