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On a Fundamental Property of Talman-Yang's Auction under Price Control

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  • Zaifu Yang
  • Dongmo Zhang

Abstract

Recently Talman and Yang (2008) examined an assignment market under price control. In the market a number of heterogeneous items are to be sold to several bidders. Each bidder has a valuation on each item. The seller has a reservation price for every item. Meanwhile every item has a ceiling price imposed by a central planner. Due to price controls, there usually do not exist market-clearing prices. To deal with this allocation problem, Talman and Yang proposed a dynamic auction with rationing that always yields a constrained equilibrium. In this paper we establish that this dynamic auction can actually ï¬ nd a core allocation infinite steps, resulting in a Pareto efficient outcome. A core allocation consists of an assignment of items and a supporting price vector for the assignment.

Suggested Citation

  • Zaifu Yang & Dongmo Zhang, 2013. "On a Fundamental Property of Talman-Yang's Auction under Price Control," Discussion Papers 13/06, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:13/06
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    References listed on IDEAS

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    Cited by:

    1. Herings, P. Jean-Jacques, 2018. "Equilibrium and matching under price controls," Journal of Economic Theory, Elsevier, vol. 177(C), pages 222-244.

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    More about this item

    Keywords

    Ascending auction; multi-item auction; housing market; price control; Pareto efficiency; core.;
    All these keywords.

    JEL classification:

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

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