Bidding optimally in concurrent second-price auctions of perfectly substitutable goods


Gerding, E. H., Dash, R. K., Yuen, D. C. K. and Jennings, N. R. (2007) Bidding optimally in concurrent second-price auctions of perfectly substitutable goods. In, Sixth International Joint Conference on Autonomous Agents and Multiagent Systems (AAMAS-07), Honolulu, Hawaii, USA, 14 - 18 May 2007. , 267-274.

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Description/Abstract

We derive optimal bidding strategies for a global bidding agent that participates in multiple, simultaneous second-price auctions with perfect substitutes. We first consider a model where all other bidders are local and participate in a single auction. For this case, we prove that, assuming free disposal, the global bidder should always place non-zero bids in all available auctions, irrespective of the local bidders' valuation distribution. Furthermore, for non-decreasing valuation distributions, we prove that the problem of finding the optimal bids reduces to two dimensions. These results hold both in the case where the number of local bidders is known and when this number is determined by a Poisson distribution. This analysis extends to online markets where, typically, auctions occur both concurrently and sequentially. In addition, by combining analytical and simulation results, we demonstrate that similar results hold in the case of several global bidders, provided that the market consists of both global and local bidders. Finally, we address the efficiency of the overall market, and show that information about the number of local bidders is an important determinant for the way in which a global bidder affects efficiency.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Event Dates: May 14-18
Related URLs:
Keywords: simultaneous auctions, optimal bidding strategies, Vickrey, second-price
Divisions: Faculty of Physical Sciences and Engineering > Electronics and Computer Science > Agents, Interactions & Complexity
ePrint ID: 263267
Date Deposited: 22 Dec 2006
Last Modified: 14 Apr 2014 11:25
Projects:
Decentralised Data and Information Systems
Funded by: EPSRC (EP/C548051/1)
1 October 2005 to 31 March 2011
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/263267

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