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Modified VCG Mechanisms in Combinatorial Auctions with Budget Constraints

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  • Le, Phuong

Abstract

I present two modifications of the Vickrey-Clark-Groves mechanism to accommodate bidders' budget constraints in the combinatorial auction setting and show that they are Pareto-Optimal and (partially) incentive compatible in certain domains.

Suggested Citation

  • Le, Phuong, 2014. "Modified VCG Mechanisms in Combinatorial Auctions with Budget Constraints," MPRA Paper 66384, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:66384
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    References listed on IDEAS

    as
    1. Che, Yeon-Koo & Gale, Ian, 2000. "The Optimal Mechanism for Selling to a Budget-Constrained Buyer," Journal of Economic Theory, Elsevier, vol. 92(2), pages 198-233, June.
    2. Lawrence M. Ausubel, 2004. "An Efficient Ascending-Bid Auction for Multiple Objects," American Economic Review, American Economic Association, vol. 94(5), pages 1452-1475, December.
    3. Laffont, Jean-Jacques & Robert, Jacques, 1996. "Optimal auction with financially constrained buyers," Economics Letters, Elsevier, vol. 52(2), pages 181-186, August.
    4. Jeremy Bulow & Jonathan Levin & Paul Milgrom, 2009. "Winning Play in Spectrum Auctions," Discussion Papers 08-023, Stanford Institute for Economic Policy Research.
    5. Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April.
    6. Gul, Faruk & Stacchetti, Ennio, 2000. "The English Auction with Differentiated Commodities," Journal of Economic Theory, Elsevier, vol. 92(1), pages 66-95, May.
    7. Che, Yeon-Koo & Gale, Ian, 1996. "Expected revenue of all-pay auctions and first-price sealed-bid auctions with budget constraints," Economics Letters, Elsevier, vol. 50(3), pages 373-379, March.
    8. Hafalir, Isa E. & Ravi, R. & Sayedi, Amin, 2012. "A near Pareto optimal auction with budget constraints," Games and Economic Behavior, Elsevier, vol. 74(2), pages 699-708.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Vickrey-Clark-Groves; Combinatorial Auctions; Budget Constraints; Pareto-Optimal; Mechanism Design;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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