An Efficient and General Ascending Menu Auction under Budget Constraints

Abstract

An auctioneer wishes to sell multiple heterogeneous indivisible items to several bidders. Every bidder can demand several items, have complex preferences and faces a hard budget constraint. In this setting, Walrasian equilibria may fail to exist. We propose an ascending menu auction that always yields an efficient allocation of items, which is not only in the core but also strongly Pareto efficient. Furthermore, the auction finds a strong core allocation with a fully efficient assignment of items when bidders are not budget constrained.

Keywords

• dynamic menu auction, core
• budget constraints