An efficient multi-item dynamic auction with budget constrained bidders

Dolf Talman, Z. Yang

Research output: Contribution to journalArticleScientificpeer-review

Abstract

An auctioneer wishes to sell several heterogeneous indivisible items to a group of potential bidders. Each bidder has valuations over the items but may face a budget constraint and therefore be unable to pay up to his values. In such markets, a Walrasian equilibrium may fail to exist. We develop a novel dynamic auction and prove that the auction always finds a core allocation. In the auction prices that have been increased can be later decreased if they have become too high. The core allocation consists of an assignment of the items and its associated supporting price vector, achieves Pareto efficiency, and is robust against the threat of deviation by any coalition of market participants.
Original languageEnglish
Pages (from-to)769-784
Number of pages15
JournalInternational Journal of Game Theory
Volume44
Issue number3
DOIs
Publication statusPublished - 29 Oct 2015

Fingerprint

auction
Auctions
budget
Pareto Efficiency
Walrasian Equilibrium
Indivisible
Budget Constraint
market
Coalitions
Valuation
coalition
Assignment
Deviation
threat
efficiency
Values
Group
Market
Core allocation

Keywords

  • Dynamic auction
  • Multi-item auction
  • budget constraint
  • core
  • efficiency

Cite this

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An efficient multi-item dynamic auction with budget constrained bidders. / Talman, Dolf; Yang, Z.

In: International Journal of Game Theory, Vol. 44, No. 3, 29.10.2015, p. 769-784.

Research output: Contribution to journalArticleScientificpeer-review

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