SFB 303 Discussion Paper No. A-447

Author: Kamecke, Ulrich
Title: Dominance Solvable English Multi-item Auctions
Abstract: This paper discusses conditions under which an English multi-object auction can be solved by an iterated elimination of dominated strategies. It is well-known that in such a matching auction the construction with the Gale-Shapley algorithm coincides with the Walrasian mechanism, but it is open under what conditions rational buyers should implement this mechanism. I present two English auction games in which an iterated elimination of dominated strategies always leads to the expected outcome. The games are formulated such that the usual problems of an elimination procedure are not present.
Keywords: English auctions, matching markets, iterated elimination of dominated strategies
JEL-Classification-Number: C78, D44
Creation-Date: June 1994
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