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Auctioning one item



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Auctioning one item PART 3 Tuomas Sandholm Computer Science Department Carnegie Mellon University Undesirable private information revelation Agents strategic marginal cost information revealed because truthful bidding is a dominant strategy in Vickrey and English Observed problems with subcontractors First price sealed bid Dutch may not reveal this info as accurately Lying No dominant strategy Bidding decisions depend on beliefs about others Untruthful bidding with local uncertainty even in Vickrey Uncertainty inherent or from computation limitations Many real world parties are risk averse Computational agents take on owners preferences Thrm Sandholm ICMAS 96 It is not the case that in a private value Vickrey auction with uncertainty about an agent s own valuation it is a risk averse agent s best dominant or equilibrium strategy to bid its expected value Higher expected utility e g by bidding low Wasteful counterspeculation Thrm Sandholm ICMAS 96 In a private value Vickrey auction with uncertainty about an agent s own valuation a risk neutral agent s best deliberation or information gathering action can depend on others E g two bidders 1 and 2 bid for a good v1 uniform between 0 and 1 v2 deterministic 0 v2 0 5 Agent 1 bids 0 5 and gets item at price v2 pdf loss gain v2 1 v1 v2 dv1 v2 2 0 nopay 1 v1 E 1 1 Say agent 1 has the choice of paying c to find out v1 Then agent 1 will bid v1 and get the item iff v1 v2 no loss possibility but c invested pay 1 E 1 c v1 v 2 dv v2 E 1pay E nopay v 2 2c 1 Sniping bidding very late in the auction in the hopes that other bidders do not have time to respond Especially an issue in electronic auctions with network lag and lossy communication links from Roth Ockenfels Sniping Amazon auctions give automatic extensions eBay does not Antiques auctions have experts from Roth Ockenfels Sniping from Roth Ockenfels Mobile bidder agents in eMediator Allow user to participate while disconnected Avoid network lag Put expert bidders and novices on



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