An Extension of Ausubel's Auction for Heterogeneous Discrete Goods

Hakan Inal

No 1005, Working Papers from VCU School of Business, Department of Economics

Abstract: Ausubel's dynamic private-values auction for heterogeneous discrete goods, Ausubel (2006), yields an efficient equilibrium outcome but it is designed for a limited class of environments. If bidders' values for bundles of goods are not integers, then the auction mechanism may not yield an efficient allocation without any information on bidders' values. In this paper, I extend Ausubel's auction for heterogeneous discrete goods to real-valued quasilinear utility functions. The mechanism I propose reaches a Walrasian equilibrium price vector in finite "steps" without any additional information on bidders' values. In the extension of Ausubel's auction, truthful bidding constitutes an efficient equilibrium.

Keywords: Auctions; Ausubel auction; heterogeneous goods; discrete goods; price adjustment; tatonnement. (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-01
New Economics Papers: this item is included in nep-cta
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