Theoretical Economics, Volume 10, Number 2 (May 2015)

Theoretical Economics 10 (2015), 445–487

Strategy-proofness and efficiency with non-quasi-linear preferences: a characterization of minimum price Walrasian rule

Shuhei Morimoto, Shigehiro Serizawa


We consider the problem of allocating objects to a group of agents and how much agents should pay. Each agent receives at most one object and has non-quasi-linear preferences. Non-quasi-linear preferences describe environments where payments influence agents' abilities to utilize objects or derive benefits from them. The ``minimum price Walrasian (MPW) rule'' is the rule that assigns a minimum price Walrasian equilibrium allocation to each preference profile. We establish that the MPW rule is the unique rule satisfying \textit{strategy-proofness}, \textit{efficiency}, \textit{individual rationality}, and \textit{no subsidy for losers}. Since the outcome of the MPW rule coincides with that of the simultaneous ascending (SA) auction, our result supports SA auctions adopted by many governments.

Keywords: Minimum price Walrasian equilibrium, simultaneous ascending auction, strategy-proofness, efficiency, heterogeneous objects, non-quasi-linear preferences

JEL classification: D44, D71, D47, D82

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