Risk aversion and loss aversion in core-selecting auctions

摘要

Core-selecting combinatorial auctions have been introduced as an alternative to the Vickrey-Clarke-Groves (VCG) mechanism because VCG can result in payments that are not in the core with respect to bids, leading to unfair payments, unacceptably low revenues, and unstable outcomes. This raises an auction selection problem for an auctioneer deciding whether to employ a core-selecting auction or VCG mechanism in practice. The down-side of a core-selecting auction is that it is not incentive compati