Auctions of heterogeneous objects

Simultaneous seared bid auctions of heterogeneous objects are analyzed. Each bidder's reservation value for an object depends upon the other objects he obtains. Bidders' reservation values are common knowledge. in simultaneous first-price auctions, the set of Walrasian equilibrium allocations contains the set of pure strategy Nash equilibrium allocations which in turn contains the set of strict Walrasian equilibrium allocations. Hence, pure strategy Nash equilibria (when they exist) are efficient. Mixed strategy Nash equilibria may be inefficient. In simultaneous second-price auctions, any efficient allocation can be implemented as a pure strategy Nash equilibrium outcome if a Walrasian equilibrium exists. Classification Numbers: D44, D51. (C) 1999 Academic Press.