Auctioning or assigning an object: some remarkable VCG mechanisms |
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Authors: | Hervé Moulin |
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Institution: | 1. Houston, USA
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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. |
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Keywords: | |
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