An efficient multi-item dynamic auction with budget constrained bidders

Dolf Talman, Z. Yang

Research output: Contribution to journalArticleScientificpeer-review

2 Citations (Scopus)


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
Issue number3
Publication statusPublished - 29 Oct 2015


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


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