A general characterization of the minimum price Walrasian rule with reserve prices

Abstract

We consider economies consisting of arbitrary numbers of agents and objects, and study the multi-object allocation problem with monetary transfers. Each agent obtains at most one object (unit-demand), and has non-quasi-linear preferences, which accommodate income effects or nonlinear borrowing costs. The seller may derive benefit from objects. We show that on the non-quasi-linear domain, the minimum price Walrasian rule in which reserve prices are equal to the benefit the seller derives is the only rule satisfying four desirable properties; efficiency, individual rationality for the buyers, no-subsidy, and strategy-proofness. Moreover, we characterize the minimum price Walrasian rule by efficiency, overall individual rationality, and strategy-proofness.