Strategy-Proof Multi-Object Mechanism Design: Ex-Post Revenue Maximization With Non-Quasilinear Preferences

56 Pages Posted: 15 May 2017 Last revised: 11 Jan 2020

See all articles by Tomoya Kazumura

Tomoya Kazumura

University of Tokyo - Graduate School of Economics

Debasis Mishra

Indian Statistical Institute, New Delhi - Delhi Centre

Shigehiro Serizawa

Osaka University - Institute of Social and Economic Research (ISER)

Date Written: January 7, 2020

Abstract

A seller is selling multiple objects to a set of agents, who can buy at most one object. Each agent's preference over (object, payment) pairs need not be quasilinear. The seller considers the following desiderata for her mechanism, which she terms desirable: (1) strategy-proofness, (2) ex-post individual rationality, (3) equal treatment of equals, (4) no wastage (every object is allocated to some agent). The minimum Walrasian equilibrium price (MWEP) mechanism is desirable. We show that at each preference profile, the MWEP mechanism generates more revenue for the seller than any desirable mechanism satisfying no subsidy. Our result works for the quasilinear domain, where the MWEP mechanism is the VCG mechanism, and for various non-quasilinear domains, some of which incorporate positive income effect of agents. We can relax no subsidy to no bankruptcy in our result for certain domains with positive income effect.

Keywords: Multi-object allocation; strategy-proofness

JEL Classification: D82, D44, D40

Suggested Citation

Kazumura, Tomoya and Mishra, Debasis and Serizawa, Shigehiro, Strategy-Proof Multi-Object Mechanism Design: Ex-Post Revenue Maximization With Non-Quasilinear Preferences (January 7, 2020). ISER Discussion Paper No. 1001, Available at SSRN: https://ssrn.com/abstract=2968195 or http://dx.doi.org/10.2139/ssrn.2968195

Tomoya Kazumura

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

Debasis Mishra (Contact Author)

Indian Statistical Institute, New Delhi - Delhi Centre ( email )

7 S .J. S.
Sansanwal Marg
New Delhi, 110016
India

Shigehiro Serizawa

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan
+81 6 6879 8558 (Phone)
+81 6 6878 2766 (Fax)

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