The package assignment model

We study assignment problems where individuals trade packages consisting of several, rather than single, objects. Although buyers' reservations values are nonadditive, efficient assignments can be formulated as a linear programming problem in which the pricing functions expressing duality may be non-linear in the objects constituting the packages. The interconnections among the linear programming formulation, Walrasian equilibrium, and the core are established. In the single seller (auction) version, a necessary and sufficient condition is given for the Vickrey payoff point to be implementable by a pricing equilibrium. (C) 2002 Elsevier Science (USA).