An Efficient and Strategy-Proof Multi-Item Ascending Auction under Financial Constraints

Zaifu Yang and Jingsheng Yu

Discussion Papers from Department of Economics, University of York

Abstract: This paper proposes an ascending auction for selling multiple heterogeneous indivisible items to several potential bidders. Every bidder demands at most one item and faces a budget constraint. His valuations and budget are private information. Budget constraints may lead to the failure of competitive equilibrium. Bidders are not assumed to behave as price-takers and may therefore act strategically. We prove that the auction always induces bidders to bid truthfully and finds a strongly Pareto efficient core allocation when bidders are budget constrained, otherwise a Walrasian equilibrium with the minimum equilibrium price vector.

Keywords: Ascending auction; core; equilibrium; budget constraint; incentive; assignment market. (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:yor:yorken:22/02

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