A New Payment Rule for Core-Selecting Package Auctions.

Journal article

We propose a new, easy-to-implement class of payment rules, “Reference Rules” to make core-selecting package auctions more robust. Small, almost-riskless, profitable deviations from “truthful bidding” are often easy for bidders to find under currently used payment rules. Reference Rules perform better than existing rules on our marginal-incentive-to-deviate criterion, and are as robust as existing rules to large deviations. Other considerations, including fairness and comprehensibility, also support the use of Reference Rules.

Authors: Erdil, A; Klemperer, P

• Publisher: MIT Press
• Journal: Journal of the European Economic Association
• Volume: 8
• Issue: 2-3
• Pages: 537 - 547
• Publication date: 2010-01-01
• DOI: 10.1162/jeea.2010.8.2-3.537
• ISSN: 1542-4766
• Language: English