The deficit on each trade in a Vickrey double auction is at least as large as the Walrasian price gap
Simon Loertscher, Claudio Mezzetti
Journal of Mathematical Economics | Elsevier | Published : 2019
We prove that the deficit on each trade in a Vickrey double auction for a homogeneous good with multi-unit traders with multi-dimensional types is at least as large as the Walrasian price gap. We also show that as the number of traders grows large the aggregate deficit is bounded below by the ratio of the Walrasian price and the elasticity of excess supply at the Walrasian price.
Awarded by Australian Research Council
Mezzetti's work was funded in part by Australian Research Council grant DP120102697. Bing Liu provided outstanding research assistance. Financial support by the Samuel and June Hordern Endowment is also gratefully acknowledged.