Abstract
A generalization of the well-known Vickrey auctions are lottery qualification auctions–where the m highest bidders win the good with uniform probability, and pay the \(m+1\)st highest bid upon winning. A random lottery qualification mechanism decides the integer m randomly. We characterize the class of mechanisms which are payoff equivalent to the random lottery qualification auctions. The key property characterizing this class of mechanisms is one which states that only the ordinal comparison of willingness-to-pay across individuals is relevant in determining the allocation. The mechanisms can be seen as compromising between ex-post utility efficiency and monetary efficiency.
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Notes
This mechanism is usually understood as a hybrid of a “rationing” mechanism and an auction; see, e.g., Parlour et al. (2007).
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Dedicated to John Weymark with sincere thanks.
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Chambers, C.P., Richter, M. Ordinal allocation. Soc Choice Welf 60, 5–14 (2023). https://doi.org/10.1007/s00355-020-01280-0
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DOI: https://doi.org/10.1007/s00355-020-01280-0