On the Fastest Vickrey Algorithm

RM/07/13

18 Pages Posted: 28 Aug 2008

See all articles by Elena Grigorieva

Elena Grigorieva

Maastricht University - Department of Economics

P. Jean-Jacques Herings

Tilburg University

Rudolf Muller

University of Maastricht

Date Written: April 13, 2007

Abstract

We investigate the algorithmic performance of Vickrey-Clarke-Groves mechanisms in the single item case. We provide a formal definition of a Vickrey algorithm for this framework, and give a number of examples of Vickrey algorithms. We consider three performance criteria, one corresponding to a Pareto criterion, one corresponding to worst case analysis, and a third criterion related to first-order stochastic dominance. We show that Pareto optimal Vickrey algorithms do not exist and that worst case analysis is of no use in discriminating between Vickrey algorithms. For the case of two bidders, we show the bisection auction to be optimal according to the third criterion. The bisection auction is therefore optimal in a very strong sense.

Keywords: Single item auctions, Vickrey-Clarke-Groves implementation, algorithms, performance

JEL Classification: C72, D44

Suggested Citation

Grigorieva, Elena and Herings, P. Jean-Jacques and Muller, Rudolf, On the Fastest Vickrey Algorithm (April 13, 2007). RM/07/13, Available at SSRN: https://ssrn.com/abstract=1260203 or http://dx.doi.org/10.2139/ssrn.1260203

Elena Grigorieva

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
++ 31 43 388 3853 (Phone)

P. Jean-Jacques Herings (Contact Author)

Tilburg University ( email )

Department of Econometrics and Operations Research
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4668797 (Phone)
5000 LE (Fax)

HOME PAGE: http://https://sites.google.com/view/jean-jacques-herings/home

Rudolf Muller

University of Maastricht ( email )

Department of Quantitative Economics
P.O. Box 616
6200 MD Maastricht
Netherlands

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