Ausubel, Lawrence: A Generalized Vickrey Auction
World Conference Econometric Society, 2000, Seattle

Lawrence Ausubel, University of Maryland
A Generalized Vickrey Auction
Session: C-11-1  Tuesday 15 August 2000  by Ausubel, Lawrence
In auction environments where bidders have pure private values, the Vickrey auction (Vickrey, 1961) provides a simple mechanism for efficiently allocating homogeneous goods. However, in environments where bidders have interdependent values, the Vickrey auction does not generally yield efficiency. This manuscript defines a "generalized Vickrey auction" which yields efficiency when bidders have interdependent values. Each bidder reports her type to the auctioneer. Given the reports, the auctioneer determines the allocation that maximizes surplus. The payment rule is the following extension of Vickrey auction pricing: a bidder is charged for a given unit that she wins according to valuations evaluated at the minimum signal that she could have reported and still won that unit.
Submitted paper full-text in .pdf

File created by Jurgen Doornik with eswc2000.ox on 2-01-2001