Events

Economics Seminar

Authors:

• Shigehiro Serizawa
  Osaka University

• Shuhei Morimoto
  Osaka University

We consider the problem of allocating several heterogeneous objects owned by governments into a group of agents and how much they should pay. Each agent receives at most one object and has nonquasi-linear preferences. Nonquasi-linear preferences describe the environments where the large scale of auction payments influence agents' abilities to utilize objects or benefits from them. The "minimum price Walrasian (MPW) rule" is the rule that assigns a minimum price Walrasian equilibrium allocation to each preference profile. In this article, we establish that the MPW rule is a unique rule that satisfies strategy-proofness, Pareto-efficiency, individual rationality, and nonnegative payment on the domain including nonquasi-linear preferences. This result does not only recommend the MPW rule based on the four desirable properties, but also suggest that governments cannot improve upon the MPW rule once they consider the four properties essential. Since the outcome of the MPW rule coincides with that of the simultaneous ascending (SA) auction, our result explains the pervasive use of the SA auction.