International Journal of Game Theory

, Volume 36, Issue 3–4, pp 393–407 | Cite as

Core-selecting package auctions

  • Robert Day
  • Paul MilgromEmail author
Original Paper


Auctions that select core allocations with respect to reported values generate competitive levels of sales revenues at equilibrium and limit bidder incentives to use shills. Among core-selecting auctions, the ones that minimize seller revenues also maximize incentives for truthful reporting, produce the Vickrey outcome when that lies in the core and, in contrast to the Vickrey auction, and create no incentive for a seller to exclude qualified bidders. Core-selecting auctions are related to and share properties with stable matching mechanisms.


Core Stable matching Marriage problem Auctions Core-selecting auctions Menu auctions Proxy auctions Package bidding Combinatorial bidding Incentives Truncation strategies 

JEL Classification Numbers

D44 C78 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Abdulkadiroglu A, Pathak P, Roth A, Sonmez T (2005) The Boston Public School Match. In: AEA papers and proceedings, pp 368–371Google Scholar
  2. Ausubel L, Milgrom P (2002) Ascending auctions with package bidding. Front Theor Econ 1(1), Article 1Google Scholar
  3. Ausubel L, Milgrom P (2005) The lovely but lonely vickrey auction. In: Cramton P, Shoham Y, Steinberg R (eds) Combinatorial auctions. MIT Press, CambridgeGoogle Scholar
  4. Bernheim BD, Whinston M (1986) Menu auctions, resource allocation and economic influence. Q J Econ 101:1–31CrossRefGoogle Scholar
  5. Bertrand J (1883) Théorie Mathématique de la Richesse Sociale. J des Savants 69:499–508Google Scholar
  6. Day RW, Raghavan S (2006) Fair payments for efficient allocations in public sector combinatorial auctions. Manag Sci (Forthcoming)Google Scholar
  7. Green J, Laffont J-J (1979) Incentives in public decision making. North Holland, AmsterdamGoogle Scholar
  8. Hatfield J, Milgrom P (2005) Matching with contracts. Am Econ Rev 95(4):913–935CrossRefGoogle Scholar
  9. Holmstrom B (1979) Groves schemes on restricted domains. Econometrica 47:1137–1144CrossRefGoogle Scholar
  10. Kagel J, Roth A (2000) The dynamics of reorganization in matching markets: a laboratory experiment motivated by a natural experiment. Q J Econ:201–235Google Scholar
  11. Kelso A, Crawford V (1982) Job matching, coalition formation, and gross substitutes. Econometrica 50:1483–1504CrossRefGoogle Scholar
  12. McMillan J (1994) Selling spectrum rights. J Econ Perspect 8:145–162Google Scholar
  13. Milgrom P (2004) Putting auction theory to work. Cambridge University Press, CambridgeGoogle Scholar
  14. Milgrom P (2006) Incentives in core-selecting auctions. Stanford UniversityGoogle Scholar
  15. Parkes D, Ungar L (2000) Iterative combinatorial auctions: theory and practice. In: Proceedings of the 17th national conference on artificial intelligence, pp 74–81Google Scholar
  16. Reny P (1999) On the existence of pure and mixed strategy nash equilibria in discontinuous games. Econometrica 67(5):1029–1056CrossRefGoogle Scholar
  17. Roberts J, Postlewaite A (1976) The incentives for price-taking behavior in large exchange economies. Econometrica 44(1):115–129CrossRefGoogle Scholar
  18. Roth AE (1982) The economics of matching: stability and incentives. Math Oper Res 7:617–628CrossRefGoogle Scholar
  19. Roth AE, Peranson E (1999) The redesign of the matching market for American physicians: some engineering aspects of economic design. Am Econ Rev 89:748–780CrossRefGoogle Scholar
  20. Roth AE, Sotomayor M (1990) Two-sided matching: a study in game-theoretic modeling and analysis. Cambridge University Press, CambridgeGoogle Scholar
  21. Roth AE, Xing X (1994) Jumping the gun: imperfections and institutions related to the timing of market transactions. Am Econ Rev 84:992–1044Google Scholar
  22. Segal I (2003) The communication requirements of combinatorial auctions. In: Cramton P, Shoham Y, Steinberg R (eds) Combinatorial Auctions. Princeton University Press, PrincetonGoogle Scholar
  23. Simon LK, Zame WR (1990) Discontinuous games and endogenous sharing rules. Econometrica 58: 861–872CrossRefGoogle Scholar
  24. Yokoo M, Sakurai Y, Matsubara S (2004) The effect of false-name bids in combinatorial auctions: new fraud in internet auctions. Games Econ Behav 46(1):174–188CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  1. 1.School of BusinessUniversity of ConnecticutStorrsUSA
  2. 2.Department of EconomicsStanford UniversityStanfordUSA

Personalised recommendations