Research Paper A Dynamic Mechanism Design for Scheduling with Different Use Lengths

Sano, Ryuji

This paper considers a dynamic allocation problem in which many perishable goods are allocated at each period. Agents want to keep winning goods for more than one period to make profits. We consider efficient and optimal mechanisms when the seller offers simple long-term contracts. The dynamic VCG mechanism achieves efficient allocations. The expected revenue is maximized by the virtual welfare maximization. In the single unit case, price discounts for long-stay agents can be optimal under certain distributions. Both the efficient and optimal mechanisms are implemented by a simple "handicap auction" in the binary length case.

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