A multi-item auction with budget-constrained bidders and price controls

- We consider a multi-item auction model with unit-demand bidders.
- Both budget constraints and price controls are allowed.
- A rationed equilibrium whose allocation is in the core is proposed.
- An ascending auction is constructed to find the proposed equilibrium.

We extend the multi-item auction model of Talman and Yang (2008) and Andersson et al. (2015) by considering both unit-demand bidders with budget constraints and price controls on bidding items. Due to these budget and price restrictions, a Walrasian equilibrium generally fails to exist. To achieve efficiency, we propose a rationed equilibrium whose allocation is in the core. We also construct an ascending auction to find the proposed rationed equilibrium in (pseudo-)polynomial time.