Multi-unit Auctions with Budget Constraints
Computer Science and Game Theory
2011-03-03 v2
Abstract
Motivated by sponsored search auctions, we study multi-unit auctions with budget constraints. In the mechanism we propose, Sort-Cut, understating budgets or values is weakly dominated. Since Sort-Cut's revenue is increasing in budgets and values, all kinds of equilibrium deviations from true valuations turn out to be beneficial to the auctioneer. We show that the revenue of Sort-Cut can be an order of magnitude greater than that of the natural Market Clearing Price mechanism, and we discuss the efficiency properties of its ex-post Nash equilibrium.
Cite
@article{arxiv.0903.1450,
title = {Multi-unit Auctions with Budget Constraints},
author = {I. Hafalir and R. Ravi and A. Sayedi},
journal= {arXiv preprint arXiv:0903.1450},
year = {2011}
}