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A Universally Efficient Dynamic Auction for All Unimodular Demand Types

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  • Satoru Fujishige
  • Zaifu Yang

Abstract

We propose a novel strategy-proof dynamic auction for efficiently allocating heterogeneous indivisible commodities. The auction applies to all unimodular demand types of Baldwin and Klemperer’s necessary and sufficient condition for the existence of competitive equilibrium which accommodate a variety of complements, substitutes, gross substitutes and complements, and any other kinds. Although bidders are not assumed to be price-takers so they can act strategically, this auction induces bidders to bid truthfully, yielding efficient outcomes. Sincere bidding is shown to be an ex post perfect Nash equilibrium of the auction. The trading rules are simple, detail-free, privacy-preserving, error-tolerant, and independent of any probability distribution assumption.

Suggested Citation

  • Satoru Fujishige & Zaifu Yang, 2025. "A Universally Efficient Dynamic Auction for All Unimodular Demand Types," Discussion Papers 25/02, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:25/02
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    References listed on IDEAS

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