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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 At Sixth International Joint Conference on Autonomous Agents and Multiagent Systems (AAMAS-07), United States. 14 - 18 May 2007. , pp. 267-274.

Record type: Conference or Workshop Item (Paper)

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.

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More information

Published date: 2007
Additional Information: Event Dates: May 14-18
Venue - Dates: Sixth International Joint Conference on Autonomous Agents and Multiagent Systems (AAMAS-07), United States, 2007-05-14 - 2007-05-18
Keywords: simultaneous auctions, optimal bidding strategies, Vickrey, second-price
Organisations: Agents, Interactions & Complexity

Identifiers

Local EPrints ID: 263267
URI: http://eprints.soton.ac.uk/id/eprint/263267
PURE UUID: 82e065fe-dd00-4fdf-be77-6749bf48eec7

Catalogue record

Date deposited: 22 Dec 2006
Last modified: 18 Jul 2017 07:47

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Contributors

Author: E. H. Gerding
Author: R. K. Dash
Author: D. C. K. Yuen
Author: N. R. Jennings

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