Key Takeaways
Gradual dutch auctions (GDAs) are a class of auctions that have been proposed when an auctioneer would like to sell a batch of illiquid items.
This paper shows that the seller can deviate from truthfully running a GDA via an attack in which she initially buys a fraction of the supply available in each dutch auction, forcing buyers to fill their demand with later (more expensive) auctions.
It then analyzes the incentives of participating in Gradual Dutch Auctions, and shows the conditions in which GDAs are ex post incentive compatible and individually rational for buyers.
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