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The Conditional Auction Mechanism for Sharing a Surplus

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  • H. Moulin

Abstract

A first-bid auction to allocate the leadership role is used to choose a public decision and a balanced set of transfers. The mechanism is shown to implement an equal-sharing of the surplus above the "average" utility level. At the equilibrium an agent's message reveals the other agent's utility (when only two players are involved) and the exact value of the joint surplus. A variety of other contexts allow for the construction of similar auction-like mechanisms displaying the same mirror-image effect.

Suggested Citation

  • H. Moulin, 1984. "The Conditional Auction Mechanism for Sharing a Surplus," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(1), pages 157-170.
    • Handle: RePEc:oup:restud:v:51:y:1984:i:1:p:157-170.
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    File URL: http://hdl.handle.net/10.2307/2297711
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    Citations

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    Cited by:

    1. Gian Luigi ALBANO, 2001. "A Class of All-pay Auctions with Affiliated Information," Discussion Papers (REL - Recherches Economiques de Louvain) 2001012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Sylvain Béal & Eric Rémila & Philippe Solal, 2017. "Axiomatization and implementation of a class of solidarity values for TU-games," Theory and Decision, Springer, vol. 83(1), pages 61-94, June.
    3. Chessa, Michela & Hanaki, Nobuyuki & Lardon, Aymeric & Yamada, Takashi, 2023. "An experiment on the Nash program: A comparison of two strategic mechanisms implementing the Shapley value," Games and Economic Behavior, Elsevier, vol. 141(C), pages 88-104.
    4. Pérez-Castrillo, David & Quérou, Nicolas, 2012. "Smooth multibidding mechanisms," Games and Economic Behavior, Elsevier, vol. 76(2), pages 420-438.
    5. Philippe Solal & Sylvain Béal & Sylvain Ferrières & Eric Rémila, 2017. "Axiomatic and bargaining foundation of an allocation rule for ordered tree TU-games," Post-Print halshs-01644811, HAL.
    6. Nicolò, Antonio & Velez, Rodrigo A., 2017. "Divide and compromise," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 100-110.
    7. Jackson, Matthew & Moulin, Hervé, 1992. "Implementing a public project and distributing its cost," Journal of Economic Theory, Elsevier, vol. 57(1), pages 125-140.
    8. Matt Essen & John Wooders, 2020. "Dissolving a partnership securely," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(2), pages 415-434, March.
    9. Yuan Ju, 2013. "Efficiency and compromise: a bid-offer–counteroffer mechanism with two players," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(2), pages 501-520, May.
    10. Michela Chessa & Nobuyuki Hanaki & Aymeric Lardon & Takashi Yamada, 2021. "An Experiment on the Nash Program: Comparing two Mechanisms Implementing the Shapley Value," GREDEG Working Papers 2021-07, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    11. Jean Fernand Nguema, 2003. "Sense of impartiality," Economics Bulletin, AccessEcon, vol. 4(31), pages 1-7.
    12. Ermolov, Andrew N., 1995. "Coalitional manipulation in a quasilinear economy," Games and Economic Behavior, Elsevier, vol. 8(2), pages 349-363.
    13. Choi, Jaewon & Kim, Taesung, 1999. "A Nonparametric, Efficient Public Good Decision Mechanism: Undominated Bayesian Implementation," Games and Economic Behavior, Elsevier, vol. 27(1), pages 64-85, April.
    14. David Pérez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.

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