Efficient multiunit auctions for normal goods

Abstract

I study multiunit auction design when bidders have private values, multiunit demands, and non‐quasilinear preferences. Without quasilinearity, the Vickrey auction loses its desired incentive and efficiency properties. I give conditions under which we can design a mechanism that retains the Vickrey auction's desirable incentive and efficiency properties: (1) individual rationality, (2) dominant strategy incentive compatibility, and (3) Pareto efficiency. I show that there is a mechanism that retains the desired properties of the Vickrey auction if there are two bidders who have single‐dimensional types. I also present an impossibility theorem that shows that there is no mechanism that satisfies Vickrey's desired properties and weak budget balance when bidders have multidimensional types.

The net effect of advice on strategy-proof mechanisms: an experiment for the Vickrey auction

“…27 Sincere bidding for the first unit has a justification both from the theoretical and experimental perspectives. Baisa (2020) theoretically shows that two types of bids dominate in the multi-unit Vickrey auction: non-sincere bidding for the first unit and underbidding for the second unit. Moreover, we can regard the situation for the Ausubel subject after his/her first demand reduction as the single-unit English auction.…”