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| Title: | Bidding Strategies for Simultaneous Ascending Auctions |
| Authors: | Wellman, Michael P.
Osepayshvilli, Anna
MacKie-Mason, Jeffrey K.
Reeves, Daniel |
| Keywords: | auctions
mechanism design
game theory |
| Issue Date: | 2008 |
| Publisher: | The Berkeley Electronic Press |
| Citation: | Michael P. Wellman, Anna Osepayshvili, Jeffrey K. MacKie-Mason, and Daniel Reeves (2008) "Bidding Strategies for Simultaneous Ascending Auctions," The B.E. Journal of Theoretical Economics: Vol. 8: Iss. 1 (Topics), Article 27. http://www.bepress.com/bejte/vol8/iss1/art27 <http://hdl.handle.net/2027.42/61930> |
| Abstract: | Simultaneous ascending auctions present agents with various strategic problems, depending on preference structure. As long as bids represent non-repudiable offers, submitting noncontingent bids to separate auctions entails an 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: 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 demand-reduction strategies address the own price effect problem more directly and perform better. |
| Appears in Collections: | Information, School of (SI)
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| bejte-2008-Bidding Strategies for Simultaneous Ascending Auctions.pdf | Bidding Strategies for Simultaneous Ascending Auctions | 650Kb | Adobe PDF | View/Open |
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