Allocating multiple units

Kala Krishna, Torben Tranæ

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

This paper studies the allocation and rent distribution in multi-unit, combinatorial-bid auctions under complete information. We focus on the natural multi-unit analogue of the first-price auction, where buyers bid total payments, pay their bids, and where the seller allocates goods to maximize his revenue. While there are many equilibria in this auction, only efficient equilibria remain when the truthful equilibrium restriction of the menu-auction literature is used. Focusing on these equilibria we first show that the first-price auction just described is revenue and outcome equivalent to a Vickrey auction, which is the multi unit analogue of a second-price auction. Furthermore, we characterize these equilibria when valuations take a number of different forms: diminishing marginal valuations, increasing average valuations, and marginal valuations with single turning points.

Original languageEnglish (US)
Pages (from-to)733-750
Number of pages18
JournalEconomic Theory
Volume20
Issue number4
DOIs
StatePublished - Dec 1 2002

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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