Implementing Walrasian Equilibrium: the Languages of Product-mix Auctions

73 Pages Posted: 19 Sep 2024

See all articles by Elizabeth Baldwin

Elizabeth Baldwin

University of Oxford - Department of Economics; Hertford College, Oxford

Paul Klemperer

University of Oxford - Department of Economics; Centre for Economic Policy Research (CEPR)

Edwin Lock

University of Oxford

Date Written: July 31, 2024

Abstract

Product-mix auctions are sealed-bid mechanisms for trading multiple divisible or indivisible units of multiple differentiated goods. They implement competitive-equilibrium allocations when these exist, based on the bids that participants make in a simple geometric language. All concave substitutes (respectively, strong-substitutes) valuations can be uniquely represented, and no other valuations can be represented, by bids in the corresponding version of this language. This provides new characterisations of ordinary substitutes, and of strong substitutes, when goods are indivisible. We discuss implementation of the auctions, and extensions and variants of the language, e.g., allowing for budget constraints.

Keywords: product-mix auction, bidding language, competitive equilibrium, Walrasian equilibrium, arctic auction, substitutes, strong substitutes, indivisible goods, product mix auction.

JEL Classification: D44, D50, E58

Suggested Citation

Baldwin, Elizabeth and Klemperer, Paul and Lock, Edwin, Implementing Walrasian Equilibrium: the Languages of Product-mix Auctions (July 31, 2024). Available at SSRN: https://ssrn.com/abstract=4931623 or http://dx.doi.org/10.2139/ssrn.4931623

Elizabeth Baldwin

University of Oxford - Department of Economics ( email )

10 Manor Rd
Oxford, OX1 3UQ
United Kingdom

Hertford College, Oxford ( email )

Hertford College
Catte Street
Oxford, OX1 3BW
United Kingdom

HOME PAGE: http://elizabeth-baldwin.me.uk/

Paul Klemperer (Contact Author)

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom
+44 1865 278 588 (Phone)
+44 1865 278 557 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Edwin Lock

University of Oxford ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
62
Abstract Views
238
Rank
721,803
PlumX Metrics