Menu Auctions, Resource Allocation, and Economic Influence

by: Douglas B Bernheim, Michael D Whinston

The Quarterly Journal of Economics, Vol. 101, No. 1. (1986), pp. 1-31.

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Abstract

In many examples of competitive bidding (e.g., government construction contracting) the relevant object is either partially divisible or ill-defined, in contrast to much of the recent theoretical work on auctions. In this paper we consider a more general class of auctions, in which bidders name a "menu" of offers for various possible actions (allocations) available to the auctioneer. We focus upon "first-price" menu auctions under the assumption of complete information, and show that, for an attractive refinement of the set of Nash Equilibria, an efficient action always results. Our model also has application to situations of economic influence, in which interested parties independently attempt to influence a decision-maker's action.

@article{citeulike:2948406, abstract = {In many examples of competitive bidding (e.g., government construction contracting) the relevant object is either partially divisible or ill-defined, in contrast to much of the recent theoretical work on auctions. In this paper we consider a more general class of auctions, in which bidders name a "menu" of offers for various possible actions (allocations) available to the auctioneer. We focus upon "first-price" menu auctions under the assumption of complete information, and show that, for an attractive refinement of the set of Nash Equilibria, an efficient action always results. Our model also has application to situations of economic influence, in which interested parties independently attempt to influence a decision-maker's action.}, author = {Bernheim, Douglas B. and Whinston, Michael D. }, citeulike-article-id = {2948406}, doi = {10.2307/1884639}, journal = {The Quarterly Journal of Economics}, keywords = {agency, contract, microeconomic\_theory}, number = {1}, pages = {1--31}, posted-at = {2008-07-01 15:02:09}, priority = {4}, publisher = {The MIT Press}, title = {Menu Auctions, Resource Allocation, and Economic Influence}, url = {http://dx.doi.org/10.2307/1884639}, volume = {101}, year = {1986} }

RIS record

TY - JOUR ID - citeulike:2948406 L3 - citeulike-article-id:2948406 TI - Menu Auctions, Resource Allocation, and Economic Influence JF - The Quarterly Journal of Economics VL - 101 IS - 1 SP - 1 EP - 31 PB - The MIT Press N2 - In many examples of competitive bidding (e.g., government construction contracting) the relevant object is either partially divisible or ill-defined, in contrast to much of the recent theoretical work on auctions. In this paper we consider a more general class of auctions, in which bidders name a "menu" of offers for various possible actions (allocations) available to the auctioneer. We focus upon "first-price" menu auctions under the assumption of complete information, and show that, for an attractive refinement of the set of Nash Equilibria, an efficient action always results. Our model also has application to situations of economic influence, in which interested parties independently attempt to influence a decision-maker's action. KW - agency KW - contract KW - microeconomic_theory AU - Bernheim, Douglas AU - Whinston, Michael PY - 1986/// UR - http://dx.doi.org/10.2307/1884639 ER -

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