The agents-are-substitutes property in continuous generalized assignment problems

Abstract

The VCG mechanism has some nice properties if the agents-are-substitutes property holds.For example, for combinatorial auctions the property assures that the VCG mechanism is supported by a pricing equilibrium. The existence of such a pricing equilibrium is a necessary condition for the existence of ascending auctions that are equivalent to the VCG mechanism.Although it is known that the agents-are-substitutes property is important in several settings few problems or subclasses of problems are proven to have the property.In this paper we show for a class of problems that the agents-are-substitutes property holds. Moreover we give two rather natural and small extensions that do not have this property in general.Furthermore we show that in our simple problem class we need the possibility of price discrimination.