Ausubel, Lawrence M. and Milgrom, Paul and others :: The Lovely but Lonely Vickrey Auction

authors

Ausubel, Lawrence M. and Milgrom, Paul and others

url

http://www-siepr.stanford.edu/Papers/pdf/03-36.pdf

Paper that shows that if even two bidders in a multi-item Vickrey auction can disclose their bids to each other, they can drive the prices of their collectively desired items to zero. Dominant Strategy Truth does not hold in this modified auction. Because the modification is so minor, one can say that the Vickrey auction might represent an "unstable equilibirum" in the space of mechanisms, as measured against the design goal of enforcing dominant strategy truth.