Smooth Multibidding Mechanisms

36 Pages Posted: 4 Apr 2011

See all articles by David Pérez-Castrillo

David Pérez-Castrillo

Universidad Autonoma de Barcelona; CESifo (Center for Economic Studies and Ifo Institute)

Nicolas Querou

Queen's University Belfast - School of Management and Economics

Date Written: March 30, 2011

Abstract

We propose a smooth multibidding mechanism for environments where a group of agents have to choose one out of several projects. Our proposal is related to the multibidding mechanism (Pérez-Castrillo and Wettstein, 2002) but it is “smoother” in the sense that small variations in an agent’s bids do not lead to dramatic changes in the probability of selecting a project. This mechanism is shown to possess several interesting properties. First, the equilibrium outcome is unique. Second, it ensures an equal sharing of the surplus that it induces. Finally, it enables reaching an outcome as close to efficiency as is desired.

Keywords: mechanism design, NIMBY

JEL Classification: D780, D720

Suggested Citation

Pérez-Castrillo, David and Querou, Nicolas, Smooth Multibidding Mechanisms (March 30, 2011). CESifo Working Paper Series No. 3394, Available at SSRN: https://ssrn.com/abstract=1799263

David Pérez-Castrillo (Contact Author)

Universidad Autonoma de Barcelona ( email )

Edifici B - Campus Bellaterra
Barcelona, 08193
Spain
(34 93) 381 1405 (Phone)
(34 93) 581 2012 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Nicolas Querou

Queen's University Belfast - School of Management and Economics ( email )

25 University Square
Belfast, Northern Ireland BT7 1NN
Northern Ireland

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