Multi-object auction design: revenue maximization with no wastage
Shigehiro Serizawa  1, *@  , Tomoya Kazumura  2@  , Mishra Mishra  3@  
1 : Institute of Social Economic Research, Osaka University  (ISER)
Mihogaoka, Ibaraki, Osaka, 567-0047 -  Japan
2 : Graduate School of Economics, Osaka University
3 : Indian Statistical Institute, Delhi  (ISI)
* : Corresponding author

A seller is selling multiple objects to a set of agents. Each agent can buy at most one object and his utility over consumption bundles (i.e., (object,transfer) pairs) need not be quasilinear. The seller considers the following desiderata for her mechanism, which she terms desirable: (a) dominant strategy incentive compatibility, (b) ex-post individual rationality, (c) equal treatment of equals, (d) no wastage (every object is allocated to some agent). The minimum Walrasian equilibrium price (MWEP) mechanism is desirable. We show that the MWEP mechanism generates more revenue for the seller than any other desirable mechanism satisfying no subsidy at every profile of preferences, i.e., irrespective of the prior of the seller, the MWEP mechanism is revenue-optimal. Our result works for quasilinear type space and for various non-quasilinear type spaces which incorporates positive income effect of agents. We can relax no subsidy in our result for certain type spaces with positive income effect.


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