Second price auctions on general preference domains: Two characterizations

Research output: Contribution to journalArticle

20 Citations (Scopus)

Abstract

Auction theory usually assumes the quasi-linearity of individual preferences. We drop this assumption and define an extension of second price mechanisms that applies to general preferences. It turns out that the extended second price mechanisms are the only rules satisfying efficiency, strategy-proofness, and a mild non-imposition property. Their definition is simple just as much as the definition of usual second price mechanisms: everyone reports his maximum willingness to pay and the bidder whose reported value is highest buys the auctioned object for the price equal to the second highest reported value. The characterization is valid if efficiency is replaced by envy-freeness.

Original languageEnglish
Pages (from-to)347-356
Number of pages10
JournalEconomic Theory
Volume37
Issue number2
DOIs
Publication statusPublished - 2008 Nov 1
Externally publishedYes

Keywords

  • Envy-freeness
  • Quasi-linear preference
  • Second price mechanism (Vickrey mechanism)
  • Strategy-proofness

ASJC Scopus subject areas

  • Economics and Econometrics

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