A Note on the Core of Auctions with Externalities: No Seller's Deviation
8 Pages Posted: 21 Apr 2020
Date Written: April 19, 2020
In auctions with externalities, the core can be empty, which is undesirable both in terms of stability and fairness. We show that the core is nonempty if the seller cannot deviate, as a counterpart of the result of the nonemptiness of the core when bidders cannot refuse to pay.
Keywords: core, auction, externalities, justified envy, core-selecting mechanism
JEL Classification: C71, D44, D62
Suggested Citation: Suggested Citation