Mechanism Design in the Case of Two Objects with the Possibility for Complementarities

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Date

2011-04-18

Authors

Varma, Avtar

Journal Title

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Abstract

This research builds upon existing studies in that it investigates the possibility of expanding the mathematical and theoretical models of FPSB auctions, along with a slightly altered versions of this auction format, into a linear program in order to solve it with numerical techniques. The output generated from the linear optimization model suggests that the auction mechanisms being used today for the sale of multiple objects with complementarities may well be inefficient in maximizing seller’s revenue. The results further establish a basis for comparison of equilibrium surplus from the seller’s perspective in the case of an auction with two complementary objects. Moreover, the analytical and numerical results herein serve as a building block for future research examining different mechanism designs that will maximize seller revenue in a given auction.

Type

Honors thesis

Department

Economics

Description

Provenance

Subjects

Auction Theory, Mechanism Design, Complementarity Values, Multiple Object Auction, First-Price Sealed Bid, Optimal Mechanism

Citation

Citation

Varma, Avtar (2011). Mechanism Design in the Case of Two Objects with the Possibility for Complementarities. Honors thesis, Duke University. Retrieved from https://hdl.handle.net/10161/3555.


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