An Ex-Post Efficient Auction

Authors: 
Motty Perry & Philip J. Reny
Abstract: 

An analogue of Vickrey's (1961) multi-unit auction is provided when bidders have interdependent values. The analogue is strategically equivalent to a collection of two-bidder single-unit second-price auctions and it possesses an ex-post efficient equilibrium. As an application of this result, it is shown that the FCC auction possesses an efficient equilibrium in the case of homogeneous goods. Conditions are provided under which the new auction (and also the FCC auction) revenue-dominates all ex-post equilibria of ex-post efficient individually rational mechanisms.

Date: 
August, 1999
Published in: 
Number: 
200