A mechanism for package allocation problems with gross substitutes

We consider a package allocation problem in which a seller owns many indivisible objects and the rest of the agents, buyers, are interested in packages of these objects. Buyers’ valuations satisfy monotonicity and the gross substitutes condition (Kelso and Crawford, 1982). The aim of this paper is t...

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Bibliographic Details
Published in:Journal of mathematical economics 2020-03, Vol.87, p.6-14
Main Authors: Núñez, Marina, Rafels, Carlos, Robles, Francisco
Format: Article
Language:English
Subjects:
Gross substitutes
Mechanism
Packages
Prices
Resource allocation
Subgame perfect equilibria
Substitutes
Vendors
Vickrey outcome
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Summary:We consider a package allocation problem in which a seller owns many indivisible objects and the rest of the agents, buyers, are interested in packages of these objects. Buyers’ valuations satisfy monotonicity and the gross substitutes condition (Kelso and Crawford, 1982). The aim of this paper is to analyze the following mechanism: simultaneously, each buyer requests to the seller a package by announcing how much he would pay for it; once buyers have played, the seller decides the final assignment of packages and the prices, as long as this assignment makes no buyer worse off than with his initial request. The subgame perfect equilibrium outcomes of the mechanism correspond to the Vickrey outcome (Vickrey, 1961) of the market.
ISSN:0304-4068
1873-1538
DOI:10.1016/j.jmateco.2019.11.002