Optimal allocation mechanisms with type-dependent negative externalities (Q368060): Difference between revisions
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This article studies auctions with negative externalities in the case of externalities depending on the agent's valuation. More precisely, it analyzes the optimal auction design for linear type-dependent negative externalities. The article characterizes the optimal allocation mechanism and shows that the allocation mechanism will depend on whether the externality is ``increasing'' or ``strongly decreasing'' in the agent's valuation. The author proves that if the externality suffered by the agent increases with his valuation, the equilibrium utility of the agent is non-monotonic in the valuation. If the externality strongly decreases with his valuation, the good might be sold to the agent with lowest valuation. The article then discusses the implementation of the optimal mechanism with sealed-bid auctions. It demonstrates that if a second-price sealed-bid auction is used, then bids are not necessarily increasing in valuations. In addition, to implement the optimal auction, the seller should opt for a bid-dependent price ceiling. | |||
Property / review text: This article studies auctions with negative externalities in the case of externalities depending on the agent's valuation. More precisely, it analyzes the optimal auction design for linear type-dependent negative externalities. The article characterizes the optimal allocation mechanism and shows that the allocation mechanism will depend on whether the externality is ``increasing'' or ``strongly decreasing'' in the agent's valuation. The author proves that if the externality suffered by the agent increases with his valuation, the equilibrium utility of the agent is non-monotonic in the valuation. If the externality strongly decreases with his valuation, the good might be sold to the agent with lowest valuation. The article then discusses the implementation of the optimal mechanism with sealed-bid auctions. It demonstrates that if a second-price sealed-bid auction is used, then bids are not necessarily increasing in valuations. In addition, to implement the optimal auction, the seller should opt for a bid-dependent price ceiling. / rank | |||
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Property / reviewed by | |||
Property / reviewed by: Youssef El-Khatib / rank | |||
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Property / Mathematics Subject Classification ID | |||
Property / Mathematics Subject Classification ID: 91B26 / rank | |||
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Property / zbMATH DE Number | |||
Property / zbMATH DE Number: 6208997 / rank | |||
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Property / zbMATH Keywords | |||
auctions | |||
Property / zbMATH Keywords: auctions / rank | |||
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Property / zbMATH Keywords | |||
type-dependent externalities | |||
Property / zbMATH Keywords: type-dependent externalities / rank | |||
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Property / zbMATH Keywords | |||
mechanism design | |||
Property / zbMATH Keywords: mechanism design / rank | |||
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Property / MaRDI profile type | |||
Property / MaRDI profile type: MaRDI publication profile / rank | |||
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Property / full work available at URL | |||
Property / full work available at URL: https://doi.org/10.1007/s11238-012-9345-0 / rank | |||
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Property / OpenAlex ID | |||
Property / OpenAlex ID: W2097073495 / rank | |||
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Property / cites work | |||
Property / cites work: Endogenous entry in auctions with negative externalities / rank | |||
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Property / cites work: A Theory of Auctions and Competitive Bidding / rank | |||
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links / mardi / name | links / mardi / name | ||
Latest revision as of 20:50, 6 July 2024
scientific article
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English | Optimal allocation mechanisms with type-dependent negative externalities |
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Statements
Optimal allocation mechanisms with type-dependent negative externalities (English)
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18 September 2013
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This article studies auctions with negative externalities in the case of externalities depending on the agent's valuation. More precisely, it analyzes the optimal auction design for linear type-dependent negative externalities. The article characterizes the optimal allocation mechanism and shows that the allocation mechanism will depend on whether the externality is ``increasing'' or ``strongly decreasing'' in the agent's valuation. The author proves that if the externality suffered by the agent increases with his valuation, the equilibrium utility of the agent is non-monotonic in the valuation. If the externality strongly decreases with his valuation, the good might be sold to the agent with lowest valuation. The article then discusses the implementation of the optimal mechanism with sealed-bid auctions. It demonstrates that if a second-price sealed-bid auction is used, then bids are not necessarily increasing in valuations. In addition, to implement the optimal auction, the seller should opt for a bid-dependent price ceiling.
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auctions
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type-dependent externalities
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mechanism design
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