Working Paper: CEPR ID: DP5566
Authors: Philippe Jehiel; Moritz Meyertervehn; Benny Moldovanu
Abstract: We study multi-object auctions where agents have private and additive valuations for heterogeneous objects. We focus on the revenue properties of a class of dominant strategy mechanisms where a weight is assigned to each partition of objects. The weights influence the probability with which partitions are chosen in the mechanism. This class contains efficient auctions, pure bundling auctions, mixed bundling auctions, auctions with reserve prices and auctions with pre-packaged bundles. For any number of objects and bidders, both the pure bundling auction and separate, efficient auctions for the single objects are revenue-inferior to an auction that involves mixed bundling.
Keywords: auction; mixed bundling; revenue maximization
JEL Codes: D4; D44; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mixed bundling auctions (D44) | higher expected revenues (H27) |
| mixed bundling auctions (D44) | superior revenue compared to pure bundling (D49) |
| mixed bundling auctions (D44) | superior revenue compared to separate efficient auctions (D44) |
| weighted Vickrey-Clarke-Groves auction (D44) | maximizes sum of bidders' values (D44) |
| introduction of mixed bundling (H44) | enhances revenue (H27) |
| mixed bundling auctions (D44) | more competitive environment (L19) |
| mixed bundling auctions with optimal reserve prices (D44) | robust revenue-enhancing effect (H27) |