A comparison of pricing rules for auctions and fair division games
type: Item
instance of: scholarly article
title: A comparison of pricing rules for auctions and fair division games
zbMATH Open document ID: 0615.90017
DOI: 10.1007/BF00433534
published in: Social Choice and Welfare
publication date: 1986-01-01T00:00:00Z
review text: Consider an auction or fair division game where every bidder knows his true value of the single object but is only incompletely informed about the true values of his competitors. By imposing the axiom of envy freeness with respect to stated preferences the set of pricing rules is restricted to the prices between the highest and second highest bid. Whereas for auctions one also can satisfy incentive compatibility, the same is not true for fair division games. We analyse and compare the different pricing rules, partly incentive compatible and partly not, by deriving the optimal bidding strategies. By comparing the payoff expectations induced by the various pricing rules we can prove directly a special equivalence statement saying that expected payoffs do not depend on the pricing rule. It is interesting that in fair division games equivalence of pricing rules is only valid if information is sufficiently incomplete.
Mathematics Subject Classification ID: 91B24
Mathematics Subject Classification ID: 91A40
zbMATH DE Number: 3997495
zbMATH Keywords: auction
zbMATH Keywords: fair division game
zbMATH Keywords: envy freeness
zbMATH Keywords: pricing rules
author: Werner Güth
author: Eric van Damme
MaRDI profile type: Publication
cites work: A Game of Fair Division
cites work: Fair division with indivisible commodities
cites work: Auctions, public tenders, and fair division games: An axiomatic approach
cites work: Games with Incomplete Information Played by “Bayesian” Players, I–III Part I. The Basic Model
cites work: A Theory of Auctions and Competitive Bidding
cites work: The Conditional Auction Mechanism for Sharing a Surplus
cites work: Optimal Auction Design
full work available at URL: https://doi.org/10.1007/bf00433534
OpenAlex ID: W1997197424
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description: scientific article; zbMATH DE number 3997495