A mechanism for multiple goods and interdependent valuations

Abstract

This paper reports on the design of an auction mechanism for allocating multiple goods when the buyers have interdependent valuations. We cast the problem as a multi-agent system consisting of selfish, rational agents and develop an auction mechanism which is efficient, incentive compatible and individually rational. We first discuss the necessary assumptions that any mechanism developed for this scenario should satisfy so as to achieve the aforementioned properties. We then present our mechanism and show how it is a generalisation of the Vickrey-Clarke-Groves mechanism. © Springer-Verlag Berlin Heidelberg 2005.