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An Efficient and General Ascending Menu Auction under Budget Constraints

Author

Listed:
  • Zaifu Yang

    (University of York, United Kingdom)

  • Jingsheng Yu

    (Wuhan University, China)

Abstract

An auctioneer wishes to sell multiple heterogeneous indivisible items to several bidders. Every bidder can demand several items, have complex preferences and faces a hard budget constraint. In this setting, Walrasian equilibria may fail to exist. We propose an ascending menu auction that always yields an efficient allocation of items, which is not only in the core but also strongly Pareto efficient. Furthermore, the auction finds a strong core allocation with a fully efficient assignment of items when bidders are not budget constrained.

Suggested Citation

  • Zaifu Yang & Jingsheng Yu, 2024. "An Efficient and General Ascending Menu Auction under Budget Constraints," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 9(1), pages 105-130, December.
    • Handle: RePEc:jmi:articl:jmi-v9i1a6
    DOI: 10.22574/jmid.2024.12.006
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    More about this item

    Keywords

    Dynamic menu auction; core; budget constraints.;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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