An Efficient Dynamic Auction for Heterogeneous Commodities

Ausubel, Lawrence M.

doi:10.1257/aer.96.3.602

Cited by 223 publications

(267 citation statements)

References 27 publications

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“…We take as our primary motivation the well-known fact that a VCG outcome may not be a core outcome, and thus may be considered "socially unacceptable," and unfit for an auction of public goods. Consider the following three-bidder, two-item example from Ausubel (2006)…”

Section: Bidder-pareto-optimal Core Mechanismsmentioning

confidence: 99%

Fair Payments for Efficient Allocations in Public Sector Combinatorial Auctions

2007

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M otivated by the increasing use of auctions by government agencies, we consider the problem of fairly pricing public goods in a combinatorial auction. A well-known problem with the incentive-compatible Vickrey-Clarke-Groves (VCG) auction mechanism is that the resulting prices may not be in the core. Loosely speaking, this means the payments of the winners could be so low, that there are bidders who would have been willing to pay more than the payments of the winning bidders. Clearly, this "unfair" outcome is unacceptable for a public sector auction. Recent advances in auction theory suggest that combinatorial auctions resulting in efficient outcomes and bidder-Pareto-optimal core payments offer a viable practical alternative to address this problem.This paper confronts two critical issues facing the bidder-Pareto-optimal core payment. First, motivated to minimize a bidder's ability to benefit through strategic manipulation (through collusive agreement or unilateral action), we demonstrate the strength of a mechanism that minimizes total payments among all such auction outcomes, narrowing the previously broad solution concept. Second, we address the computational difficulties of achieving these outcomes with a constraint-generation approach, promising to broaden the range of applications for which bidder-Pareto-optimal core pricing achieves a comfortably rapid solution.

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Section: Bidder-pareto-optimal Core Mechanismsmentioning

confidence: 99%

Fair Payments for Efficient Allocations in Public Sector Combinatorial Auctions

2007

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“…They prove through a salary adjustment process that there exists an equilibrium, if every firm views all workers as substitutes. This latter condition is called gross substitutes and has been widely used in auction, matching and housing models, see for instance, Roth and Sotomayor (1990), Stacchetti (1999, 2000), Milgrom (2000), Ausubel (2006), Sun and Yang (2006), and Ostrovsky (2008). This paper presents a new model, the partnership formation problem that subsumes and extends the assignment models studied by Koopmans and Beckmann (1957), Shapley and Shubik (1972), and Crawford and Knoer (1981).…”

mentioning

confidence: 99%

A model of partnership formation

Talman

Yang

2011

Journal of Mathematical Economics

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This paper presents a model of partnership formation. A set of agents wants to conduct some business or other activities. Agents may act alone or seek a partner for cooperation and need in the latter case to consider with whom to cooperate and how to share the profit in a collaborative and competitive environment. We provide necessary and sufficient conditions under which an equilibrium can be attained. In equilibrium, the partner formation and the payoff distribution are endogenously determined. Every agent realizes his full potential and has no incentive to deviate from either staying independent or from the endogenously determined partner and payoff. The partnership formation problem contains the classical assignment market problem as a special case.

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“…Let W NE denote the set of all NEPs for the game, with strategy space W and payoff functions given by (13), induced by the VCG-Kelly mechanism. Our main theorem on the existence and efficiency of NEPs is the following.…”

Section: Special Buyers Assumptionmentioning

confidence: 99%

“…The mechanism of [12] can be viewed as an instance of the VCG-Kelly mechanism, but for two-parameter surrogate functions. The recent paper of Ausubel [13] describes an allocation mechanism which is a generalization of ascending price auctions, which can provide efficient allocation using one dimensional bids for the allocation problem we address, but the payments are computed by integrating over price trajectories.…”

Section: Introductionmentioning

confidence: 99%