TY - JOUR
T1 - The English Auction with Differentiated Commodities
AU - Gul, Faruk
AU - Stacchetti, Ennio
N1 - Funding Information:
1This research was supported in part by the National Science Foundation. Faruk Gul also thanks the Alfred P. Sloan Foundation for its support. We are grateful to Richard McLean for making us aware of matroid theory and its relevance for this work, and to David McAdams for pointing out an error.
PY - 2000/5
Y1 - 2000/5
N2 - We study economies (with indivisibilities) that satisfy the gross substitutes (GS) condition. We define an excess demand set with the property that increasing the prices of all goods in excess demand eventually leads to the smallest Walrasian prices. This procedure is a generalization of the auction studied by G. Demange, D. Gale and M. J. Sotomayor, Polit. Econ.94 (1986), 863-872. In our auction, truthful revelation of demand is a perfect Bayesian equilibrium if the smallest Walrasian prices correspond to the Vickrey-Clarke-Groves payments. However, no dynamic auction can reveal sufficient information to implement the Vickrey mechanism if all GS preferences are allowed. Journal of Economic Literature Classification Numbers: D4, D44, D5, D51.
AB - We study economies (with indivisibilities) that satisfy the gross substitutes (GS) condition. We define an excess demand set with the property that increasing the prices of all goods in excess demand eventually leads to the smallest Walrasian prices. This procedure is a generalization of the auction studied by G. Demange, D. Gale and M. J. Sotomayor, Polit. Econ.94 (1986), 863-872. In our auction, truthful revelation of demand is a perfect Bayesian equilibrium if the smallest Walrasian prices correspond to the Vickrey-Clarke-Groves payments. However, no dynamic auction can reveal sufficient information to implement the Vickrey mechanism if all GS preferences are allowed. Journal of Economic Literature Classification Numbers: D4, D44, D5, D51.
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U2 - 10.1006/jeth.1999.2580
DO - 10.1006/jeth.1999.2580
M3 - Article
AN - SCOPUS:0005600314
SN - 0022-0531
VL - 92
SP - 66
EP - 95
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -