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First Price Package Auction with Many Traders

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  • Shirata, Yasuhiro

Abstract

This paper studies a first price package auction in which multiple sellers participate in addition to multiple buyers. We generalize the notion of the profit-target strategy which is first introduced as a truthful strategy in a first price package auction with a single seller by Bernheim and Whinston (1986b). We then show that the set of equilibrium payoffs in profit-target strategies is equal to the bidder-optimal core, and is also equal to the set of coalition-proof Nash equilibria. Using this result, we find that any equilibrium payoff vector is weakly Pareto-dominated by the VCG payoff vector for buyers, and that the Walrasian competitive equilibrium payoff vector is weakly Pareto-dominated by some equilibrium payoff vector for buyers, even if goods are substitutes. This contrasts with the first price package auction with a single seller, in which it is shown that if goods are substitutes, then those three outcomes are payoff-equivalent.
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  • Shirata, Yasuhiro, 2013. "First Price Package Auction with Many Traders," ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) 10252/5134, Otaru University of Commerce.
    • Handle: RePEc:ota:busdis:10252/5134
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    References listed on IDEAS

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    1. de Vries, Sven & Schummer, James & Vohra, Rakesh V., 2007. "On ascending Vickrey auctions for heterogeneous objects," Journal of Economic Theory, Elsevier, vol. 132(1), pages 95-118, January.
    2. Hitoshi Matsushima, 2011. "Efficient Combinatorial Exchanges with Opt-Out Types (Revised version of CARF-F-258)(Published in the B. E. Journal of Theoretical Economics 19 (1), 2019.)," CARF F-Series CARF-F-294, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo, revised Aug 2012.
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    Cited by:

    1. Yasuhiro Shirata, 2011. "Formation of Decentralized Manufacturer-Supplier Networked Market," Global COE Hi-Stat Discussion Paper Series gd11-186, Institute of Economic Research, Hitotsubashi University.

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