We thank Dirk Bergemann, Awi Federgruen, Drew Fudenberg, Jacob Goeree, Johannes Hörner, Alexej Kushnir, Benny Moldovanu, Larry Samuelson, Jay Sethuraman, Rakesh Vohra, a co-editor, three anonymous referees, and audiences at Bonn, Boston College, Boston University, Columbia, PSE, UPenn, Stanford, Yale, the Game Theory World Congress 2012, Istanbul, ISMP Berlin 2012, KAIST, SUFE, and the 11th SSCW meeting in New Delhi for comments and discussions. Che and Kim acknowledge the support by the WCU program through the National Research Foundation of Korea funded by the Ministry of Education, Science and Technology (Grant R32-2008-000-10056-0). Mierendorff gratefully acknowledges financial support from the European Research Council (ERC Advanced Investigator Grant ESEI-249433). Part of this research was conducted while Che visited the University of Zürich, Mierendorff visited Yonsei University, and Kim visited Columbia University; they are grateful for the hospitality of the hosting institutions.
Generalized Reduced-Form Auctions: A Network-Flow Approach
Article first published online: 13 NOV 2013
© 2013 The Econometric Society
Volume 81, Issue 6, pages 2487–2520, November 2013
How to Cite
Che, Y.-K., Kim, J. and Mierendorff, K. (2013), Generalized Reduced-Form Auctions: A Network-Flow Approach. Econometrica, 81: 2487–2520. doi: 10.3982/ECTA11405
- Issue published online: 13 NOV 2013
- Article first published online: 13 NOV 2013
- Manuscript received September, 2011; final revision received February, 2013.
- Reduced-form auctions;
- network-flow approach;
- feasible circulation flow;
- paramodular capacity constraints
We develop a network-flow approach for characterizing interim-allocation rules that can be implemented by ex post allocations. Our method can be used to characterize feasible interim allocations in general multi-unit auctions where agents face capacity constraints, both ceilings and floors. Applications include a variety of settings of practical interest, ranging from individual and group-specific capacity constraints, set-aside sale, partnership dissolution, and government license reallocation.