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Smooth multibidding mechanisms
Pérez Castrillo, David; Quérou, Nicolas
Universitat Autònoma de Barcelona. Unitat de Fonaments de l'Anàlisi Econòmica; Institut d'Anàlisi Econòmica
We propose a smooth multibidding mechanism for environments where a group of agents have to choose one out of several projects (possibly with the help of a social planner). Our proposal is related to the multibidding mechanism (Pérez-Castrillo and Wettstein, 2002) but it is "smoother" in the sense that small variations in an agent's bids do not lead to dramatic changes in the probability of selecting a project. This mechanism is shown to possess several interesting properties. Unlike in the study by Pérez Castrillo and Wettstein (2002), the equilibrium outcome is unique. Second, it ensures an equal sharing of the surplus that it induces. Finally, it enables reaching an outcome as close to effciency as is desired.
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Working papers; 849.10

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