Vickrey-reserve auctions and an equilibrium equivalence

This paper characterizes the class of combinatorial auctions that have a particular form of Nash equilibrium. We refer to this class as Vickrey-reserve auctions. In such auctions, bidders pay at least their Vickrey–Clarke–Groves payments. A specific strategy profile studied by Bernheim and Whinston [Bernheim, B.D., Whinston, M., 1986. Menu auctions, resource allocation and economic influence. Quarterly Journal of Economics 101, 1–31] is a Nash equilibrium of every Vickrey-reserve auction even in the presence of complementarities, and it implements an outcome in the bidder-optimal core.

► Combinatorial auction problem.
► “Vickrey-reserve auctions” require bidders to pay at least the Vickrey payments.
► Every Vickrey-reserve auction has the same Nash equilibrium in the core.