The Languages of Product-Mix Auctions

Product-mix auctions are sealed-bid mechanisms for trading multiple units of multiple differentiated goods. They implement competitive-equilibrium allocations based on the preferences that participants express in a geometric language. Versions we have implemented are easy to use and understand. All concave substitutes (respectively, strong substitutes) preferences can be uniquely represented, and no other preferences can be represented, by appropriate sets of permitted bids in the corresponding version of this language. These languages thus also provide new characterizations of ordinary substitutes, and of strong substitutes. We discuss implementation of the auctions, and extensions and variants of the language, e.g., allowing for budget constraints.

Please report video problems to itsupport@slmath.org.

See more of our Streaming videos on our main VMath Videos page.