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| Title: | Bidding Strategies for Simultaneous Ascending Auctions |
| Authors: | Wellman, Michael P.
Osepayshvili, Anna
MacKie-Mason, Jeffrey K.
Reeves, Daniel M. |
| Keywords: | auctions
game theory
scheduling
strategies |
| Issue Date: | 23-Jan-2008 |
| Abstract: | Simultaneous ascending auctions present agents with various
strategic problems, depending on preference structure. As long as
bids represent non-repudiable offers, submitting non-contingent bids
to separate auctions entails an \emph{exposure problem}: bidding to
acquire a bundle risks the possibility of obtaining an undesired
subset of the goods. With multiple goods (or units of a homogeneous
good) bidders also need to account for their own effects on prices.
Auction theory does not provide analytic solutions for optimal
bidding strategies in the face of these problems. We present a new
family of decision-theoretic bidding strategies that use
probabilistic predictions of final prices: \emph{self-confirming
distribution-prediction} strategies. Bidding based on these is
provably not optimal in general. But evidence using empirical
game-theoretic methods we developed indicates the strategy is quite
effective compared to other known methods when preferences exhibit
complementarities. When preferences exhibit substitutability,
simpler \emph{demand-reduction} strategies address the own price
effect problem more directly and perform better. |
| Appears in Collections: | Information, School of (SI)
Economics, Department of
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