Auctioning or assigning an object: some remarkable VCG mechanisms

Moulin, H. (2010) Auctioning or assigning an object: some remarkable VCG mechanisms. Social Choice and Welfare, 34(2), pp. 193-216. (doi:10.1007/s00355-009-0393-5)

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Abstract

We construct a variant of the Vickrey auction of a single object where the surplus is split in exogenously fixed shares between the seller and the buyers, up to a margin of error vanishingly exponentially as the number of buyers grows. When the object is the common property of the participants, we can similarly construct VCG mechanisms with a vanishingly small cash transfer to the residual claimant. For any integer q, 3 ≤ q ≤ n, we find the mechanism guaranteeing to each participant a fair share of the qth highest valuation, while minimizing the worst possible ratio of the cash transfer to the efficient surplus. We perform a parallel analysis when the object is undesirable. We compare the cash lost to the largest spread between individual valuations, and obtain the same trade-offs between fairness and the relative loss of surplus.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Moulin, Professor Herve
Authors: Moulin, H.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Social Choice and Welfare
ISSN:0176-1714
ISSN (Online):1432-217X

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