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Randomization Beats Second Price as a Prior-Independent Auction

Hu Fu, Nicole Immorlica, Brendan Lucier, Philipp Strack
2015 Proceedings of the Sixteenth ACM Conference on Economics and Computation - EC '15  
A cornerstone in the prior-independent revenue maximization literature is a result by Bulow and Klemperer (1996) showing that the second price auction without a reserve achieves (n − 1)/n of the optimal  ...  We construct a randomized mechanism that strictly outperforms the second price auction in this setting. Our mechanism inflates the second highest bid with a probability that varies with n.  ...  Inflated Second Price Auction We will consider a variant of the second price auction, which will sometimes inflate the bid of the second-highest bidder before offering that bid as a fixed price for the  ... 
doi:10.1145/2764468.2764489 dblp:conf/sigecom/FuILS15 fatcat:qo636j3bwnhixgxydwkcobarem

Randomization beats Second Price as a Prior-Independent Auction [article]

Hu Fu and Nicole Immolica and Brendan Lucier and Philipp Strack
2015 arXiv   pre-print
A cornerstone in the prior-independent revenue maximization literature is a result by Bulow and Klemperer (1996) showing that the second price auction without a reserve achieves (n-1)/n of the optimal  ...  We construct a randomized mechanism that strictly outperforms the second price auction in this setting. Our mechanism inflates the second highest bid with a probability that varies with n.  ...  Inflated Second Price Auction We will consider a variant of the second price auction, which will sometimes inflate the bid of the second-highest bidder before offering that bid as a fixed price for the  ... 
arXiv:1507.08042v1 fatcat:grqvoudlhbgcpaudp75ygdekua

Prior-Independent Auctions for Heterogeneous Bidders [article]

Guru Guruganesh, Aranyak Mehta, Di Wang, Kangning Wang
2022 arXiv   pre-print
do better than the second-price auction.  ...  We study the design of prior-independent auctions in a setting with heterogeneous bidders.  ...  Fu et al. [2015] introduced a randomized prior-independent auction called (ε, δ)-inflated second-price auction: with probability ε it runs a second-price auction, and with the rest of the probability  ... 
arXiv:2207.09429v1 fatcat:7sbnn3bfujdnfpvjsw3uvwnydq

Economics and emotion: Institutions matter

Kip Smith, John Dickhaut
2005 Games and Economic Behavior  
We first demonstrate that recording heart rates does not distort prices in these auctions.  ...  Next we consider whether knowledge of the intensity of a participant's emotional state improves our ability to predict price setting behavior beyond predictions of price based on usual economic variables  ...  seconds prior to exiting the auction.  ... 
doi:10.1016/j.geb.2004.06.017 fatcat:u5s2g4ewk5clzlq56uv3fr64xy

Bulow-Klemperer-Style Results for Welfare Maximization in Two-Sided Markets [article]

Moshe Babaioff, Kira Goldner, Yannai A. Gonczarowski
2019 arXiv   pre-print
We consider the problem of welfare maximization in two-sided markets using simple mechanisms that are prior-independent.  ...  We suggest using the Buyer Trade Reduction (BTR) mechanism, a variant of McAfee's mechanism, which is feasible and simple (in particular, deterministic, truthful, prior-independent, anonymous).  ...  The third inequality comes from the probability that the seller i is chosen as one of the first two quantiles, which is with probability precisely  ... 
arXiv:1903.06696v2 fatcat:iwpya5n4gjejhe5p6kbdf2xg4a

Bayesian Mechanism Design [chapter]

2018 Modeling Strategic Behavior  
The aforementioned unit-demand pricing problem with independently distributed values can be simplified with approximation.  ...  An important special case of multi-dimensional mechanism design is single-agent pricing; the unit-demand pricing problem is a paradigmatic challenge problem.  ...  My perspective on these problems, solutions, and concepts; and thus their presentation herein; has been shaped by a number of collaborations.  ... 
doi:10.1142/9789813239944_0012 fatcat:ljlthfwdjrfm3igyrm5crq5ym4

Managing electricity procurement cost and risk by a local distribution company

Chi-Keung Woo, Rouslan I. Karimov, Ira Horowitz
2004 Energy Policy  
It is shown that the LDC's procurement decision is consistent with least-cost procurement subject to a cost-exposure constraint, and that an internet-based multi-round auction can produce competitive price  ...  A local electricity distribution company (LDC) can satisfy some of its future electricity requirements through self-generation and volatile spot markets, and the remainder through fixed-price forward contracts  ...  Second, it does not afford each seller the immediate opportunity to revise its price offer to beat the offers from other sellers.  ... 
doi:10.1016/s0301-4215(02)00317-8 fatcat:qa7sf355tng75irq4szccruv2y

Why Do Sellers (Usually) Prefer Auctions?

Jeremy Bulow, Paul Klemperer
2009 The American Economic Review  
We compare the most common methods for selling a company or other asset when participation is costly: a simple simultaneous auction, and a sequential process in which potential buyers decide in turn whether  ...  We also discuss the effects of lock-ups, matching rights, break-up fees (as in takeover battles), entry subsidies, etc.  ...  The logic of Proposition 2 holds exactly as before: because the second-highest value in the auction is random, the auction price must be higher than the sequential mechanism's price to deter entry, if  ... 
doi:10.1257/aer.99.4.1544 fatcat:kydf2ojqrzfhvo6tvjuizqs4xq

High-performance bidding agents for the continuous double auction

Gerald Tesauro, Rajarshi Das
2001 Proceedings of the 3rd ACM conference on Electronic Commerce - EC '01  
We develop two bidding algorithms for real-time Continuous Double Auctions (CDAs) using a variety of market rules that offer what we believe to be the strongest known performance of any published bidding  ...  Under various market rules and limit price distributions, our modified Gjerstad-Dickhaut ("MGD") strategy outperforms the original GD, and generally dominates the other strategies.  ...  Second, we use larger initial margins than in [2] , and the mj values are not statistically independent: the limit prices of the less valuable units influence the initial margins of the more valuable  ... 
doi:10.1145/501158.501183 dblp:conf/sigecom/TesauroD01 fatcat:qwbjedrddze5zifh355cmsi3t4

From optimal limited to unlimited supply auctions

Jason D. Hartline, Robert McGrew
2005 Proceedings of the 6th ACM conference on Electronic commerce - EC '05  
Second, we show that the form of this auction is independent of the competitive framework used.  ...  Finally, we generalize a result from [8] and extend our understanding of the nature of the optimal competitive auction by showing that the optimal competitive auction occasionally offers prices that are  ...  For a randomized bid-independent auction, f (b-i) is a random variable. We denote the probability density of f (b-i) at z by ρ bi (z). We denote the profit of a truthful auction A on input b as A(b).  ... 
doi:10.1145/1064009.1064028 dblp:conf/sigecom/HartlineM05 fatcat:zg7uigoimjgjnezen4fndzmfpe

The Declining Price Anomaly is not Universal in Multi-Buyer Sequential Auctions (but almost is) [article]

Vishnu V. Narayan, Enguerrand Prebet, Adrian Vetta
2019 arXiv   pre-print
very large number of random sequential auction instances.  ...  This result applies to both first-price and second-price sequential auctions. Moreover, it applies regardless of the tie-breaking rule used to generate equilibria in these sequential auctions.  ...  At a price p, buyer i remains in the auction as long as there is at least one buyer j still in the auction who buyer i is willing to pay a price p to beat; that is, v i,i − p > v i,j .  ... 
arXiv:1905.00853v1 fatcat:5w5b37oj65h7xp5ctrnlr32mnq

Adaptive limited-supply online auctions

Mohammad Taghi Hajiaghayi, Robert Kleinberg, David C. Parkes
2004 Proceedings of the 5th ACM conference on Electronic commerce - EC '04  
We study a limited-supply online auction problem, in which an auctioneer has k goods to sell and bidders arrive and depart dynamically.  ...  We suppose that agent valuations are drawn independently from some unknown distribution and construct an adaptive auction that is nevertheless value-and time-strategyproof.  ...  The characterization allows for randomized price schedules, as long as the randomness is independent of an agent's reported type.  ... 
doi:10.1145/988772.988784 dblp:conf/sigecom/HajiaghayiKP04 fatcat:x6hmwwzm2zce7epguwfmvfcp3m

INFORMATION REVELATION AND BUYER PROFITS IN REPEATED PROCUREMENT COMPETITION

CHARLES J. THOMAS
2010 Journal of Industrial Economics  
Expected prices are lowest of all when the sellers learn no information about the outcome of the first contest before competing in the second.  ...  Expected prices are lowest in this final case because simultaneous (or independent) sales eliminate the competition-degrading effects of both the sellers' receipt of information and their attempts to manipulate  ...  In the auction literature this setting is referred to as a first-price, sealed bid auction in an independent, private values environment.  ... 
doi:10.1111/j.1467-6451.2010.00411.x fatcat:roxtwduqlnfd5ocakta5contz4

Buy-It-Now or Take-a-Chance: Price Discrimination Through Randomized Auctions

L. Elisa Celis, Gregory Lewis, Markus Mobius, Hamid Nazerzadeh
2014 Management science  
We propose a new randomized sales mechanism for such environments. Bidders can "buy-it-now" at a posted price, or "take-a-chance" in an auction where the top d > 1 bidders are equally likely to win.  ...  In counterfactual simulations, our mechanism increases revenue by 4.4% and consumer surplus by 14.5% compared to an optimal second-price auction.  ...  The first is a second price auction without reserve, while the second is a second price auction with optimal (revenue-maximizing) reserve.  ... 
doi:10.1287/mnsc.2014.2009 fatcat:ctd3mj7rhbc7rgd2c7gr6lhjvy

LP-based Approximation for Personalized Reserve Prices [article]

Mahsa Derakhshan, Negin Golrezaei, Renato Paes Leme
2020 arXiv   pre-print
by running eager second price auctions with reserve r.  ...  We study the problem of computing data-driven personalized reserve prices in eager second price auctions without having any assumption on valuation distributions.  ...  We believe that some of the techniques developed for lazy second price auctions can be applied to eager second price auctions as well.  ... 
arXiv:1905.01526v5 fatcat:hpfri2baazgw7knuv4oamtn67u
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