A dynamic auction for differentiated items under price rigidities

A number of heterogeneous items are to be sold to several bidders. Each bidder demands at most one item. The price of each item is not completely flexible but restricted to some admissible interval. Due to price rigidities, a Walrasian equilibrium usually fails to exist. To facilitate the allocation of items to the bidders, we propose an efficient ascending auction with rationing that yields a constrained Walrasian equilibrium outcome in a finite number of steps.