Send mixed signals - Earn more, work less

Peter Bro Miltersen, Or Sheffet

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

61 Scopus citations

Abstract

Emek et al presented a model of probabilistic single-item second price auctions where an auctioneer who is informed about the type of an item for sale, broadcasts a signal about this type to uninformed bidders. They proved that finding the optimal (for the purpose of generating revenue) pure signaling scheme is strongly NP-hard. In contrast, we prove that finding the optimal mixed signaling scheme can be done in polynomial time using linear programming. For the proof, we show that the problem is strongly related to a problem of optimally bundling divisible goods for auctioning. We also prove that a mixed signaling scheme can in some cases generate twice as much revenue as the best pure signaling scheme and we prove a generally applicable lower bound on the revenue generated by the best mixed signaling scheme.

Original languageEnglish
Title of host publicationEC '12 - Proceedings of the 13th ACM Conference on Electronic Commerce
Pages234-247
Number of pages14
DOIs
StatePublished - 2012
Externally publishedYes
Event13th ACM Conference on Electronic Commerce, EC '12 - Valencia, Spain
Duration: 4 Jun 20128 Jun 2012

Publication series

NameProceedings of the ACM Conference on Electronic Commerce

Conference

Conference13th ACM Conference on Electronic Commerce, EC '12
Country/TerritorySpain
CityValencia
Period4/06/128/06/12

Keywords

  • auctions
  • full-information setting

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