Auctioneer’s Discretion in Combinatorial Auctions (Revised version of CARF-F-261)

Abstract

We argue that in order to achieve the VCG outcomes in combinatorial auctions, the auctioneer does not need to make a full contractual agreement on the protocol with participants. We can leave the detail of its design to the auctioneer’s discretion. The auctioneer can even make it contingent on unverifiable information. We consider general dynamical protocols termed price-demand procedures, and introduce representative valuation functions, which are, with connectedness and revealed preferences, calculated easily from the occurred history. It is sufficient to examine whether the efficient allocations with and without any single buyer associated with the representative valuation functions were revealed.