On a Fundamental Property of Talman-Yang's Auction under Price Control

Zaifu Yang and Dongmo Zhang

Discussion Papers from Department of Economics, University of York

Abstract: Recently Talman and Yang (2008) examined an assignment market under price control. In the market a number of heterogeneous items are to be sold to several bidders. Each bidder has a valuation on each item. The seller has a reservation price for every item. Meanwhile every item has a ceiling price imposed by a central planner. Due to price controls, there usually do not exist market-clearing prices. To deal with this allocation problem, Talman and Yang proposed a dynamic auction with rationing that always yields a constrained equilibrium. In this paper we establish that this dynamic auction can actually ï¬ nd a core allocation infinite steps, resulting in a Pareto efficient outcome. A core allocation consists of an assignment of items and a supporting price vector for the assignment.

Keywords: Ascending auction; multi-item auction; housing market; price control; Pareto efficiency; core. (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

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