A near Pareto optimal auction with budget constraints

Hafalir, IE; Ravi, R; Sayedi, A

A near Pareto optimal auction with budget constraints

Hafalir, IE

Ravi, R Sayedi, A

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Publication Type:: Journal Article
Citation:: Games and Economic Behavior, 2012, 74 (2), pp. 699 - 708
Issue Date:: 2012-03-01

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Field	Value	Language
dc.contributor.author	Hafalir, IE https://orcid.org/0000-0002-6731-2848	en_US
dc.contributor.author	Ravi, R	en_US
dc.contributor.author	Sayedi, A	en_US
dc.date.issued	2012-03-01	en_US
dc.identifier.citation	Games and Economic Behavior, 2012, 74 (2), pp. 699 - 708	en_US
dc.identifier.issn	0899-8256	en_US
dc.identifier.uri	http://hdl.handle.net/10453/115546
dc.description.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 winners' values are above all full losers' values. © 2011 Elsevier Inc.	en_US
dc.relation.ispartof	Games and Economic Behavior	en_US
dc.relation.isbasedon	10.1016/j.geb.2011.08.001	en_US
dc.subject.classification	Economic Theory	en_US
dc.title	A near Pareto optimal auction with budget constraints	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	74	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	74	en_US

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 winners' values are above all full losers' values. © 2011 Elsevier Inc.

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http://hdl.handle.net/10453/115546