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http://hdl.handle.net/10419/29739
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| Title: | | Subsidies, knapsack auctions and Dantzig's greedy heuristic  |
| Authors: | | Ensthaler, Ludwig Giebe, Thomas |
| Issue Date: | | 2009 |
| Series/Report no.: | | Discussion papers // German Institute for Economic Research 880 |
| Abstract: | | A budget-constrained buyer wants to purchase items from a shortlisted set. Items are differentiated by quality and sellers have private reserve prices for their items. Sellers quote prices strategically, inducing a knapsack game. The buyer's problem is to select a subset of maximal quality. We propose a buying mechanism which can be viewed as a game theoretic extension of Dantzig's greedy heuristic for the classic knapsack problem. We use Monte Carlo simulations to analyse the performance of our mechanism. Finally, we discuss how the mechanism can be applied to award R&D subsidies. |
| Subjects: | | Auctions subsidies market design knapsack problem |
| JEL: | | D21 D43 D44 D45 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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