A near Pareto optimal auction with budget constraints

B-Tier
Journal: Games and Economic Behavior
Year: 2012
Volume: 74
Issue: 2
Pages: 699-708

Authors (3)

Hafalir, Isa E. (University of Technology Sydne...) Ravi, R. (not in RePEc) Sayedi, Amin (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In a setup where a divisible good is to be allocated to a set of bidders with budget constraints, we introduce a mechanism in the spirit of the Vickrey auction. In the mechanism we propose, understating budgets or values is weakly dominated. Since the revenue is increasing in budgets and values, all kinds of equilibrium deviations from true valuations turn out to be beneficial to the auctioneer. We also show that ex-post Nash equilibrium of our mechanism is near Pareto optimal in the sense that all full winnersʼ values are above all full losersʼ values.

Technical Details

RePEc Handle
repec:eee:gamebe:v:74:y:2012:i:2:p:699-708
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25