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Journal of Economic Theory and Econometrics
Journal of the Korean Econometric Society
An Efficient Double Auction
Vol.17, No.2, June 2006, 1–20
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Kiho Yoon
(Department of Economics, Korea University)
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Abstract
We study the double auction problem with interdependent values. We establish a payoff equivalence result for this environment. We also introduce the generalized Vickrey double auction which is an efficient and ex-post incentive compatible mechanism for the interdependent values environment. Using these tools, we find a necessary and sufficient condition for the existence of an efficient, Bayesian incentive compatible, interim individually rational, and ex-ante budget balancing mechanism. We show that positive interdependence makes the existence harder, while negative interdependence makes it easier.
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Keywords
Double Auction, Interdependent Values, Efficiency |
JEL classification codes
C72, D44, D82 |
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