TY - GEN
T1 - Theoretically founded optimization of auctioneer's revenues in expanding auctions
AU - Rabin, Jonathan
AU - Shehory, Onn
PY - 2008
Y1 - 2008
N2 - The expanding auction is a multi-unit auction which provides the auctioneer with control over the outcome of the auction by means of dynamically adding items for sale. Previous research on the expanding auction has provided a numeric method to calculate a strategy that optimizes the auctioneer's revenue. In this paper, we analyze various theoretical properties of the expanding auction, and compare it to VCG, a multi-unit auction protocol known in the art. We examine the effects of errors in the auctioneer's estimation of the buyers' maximal bidding values and prove a theoretical bound on the ratio between the revenue yielded by the Informed Decision Strategy (IDS) and the postoptimal strategy. We also analyze the relationship between the auction step and the optimal revenue and introduce a method of computing this optimizing step. We further compare the revenues yielded by the use of IDS with an expanding auction to those of the VCG mechanism and determine the conditions under which the former outperforms the latter. Our work provides new insight into the properties of the expanding auction. It further provides theoretically founded means for optimizing the revenue of auctioneer.
AB - The expanding auction is a multi-unit auction which provides the auctioneer with control over the outcome of the auction by means of dynamically adding items for sale. Previous research on the expanding auction has provided a numeric method to calculate a strategy that optimizes the auctioneer's revenue. In this paper, we analyze various theoretical properties of the expanding auction, and compare it to VCG, a multi-unit auction protocol known in the art. We examine the effects of errors in the auctioneer's estimation of the buyers' maximal bidding values and prove a theoretical bound on the ratio between the revenue yielded by the Informed Decision Strategy (IDS) and the postoptimal strategy. We also analyze the relationship between the auction step and the optimal revenue and introduce a method of computing this optimizing step. We further compare the revenues yielded by the use of IDS with an expanding auction to those of the VCG mechanism and determine the conditions under which the former outperforms the latter. Our work provides new insight into the properties of the expanding auction. It further provides theoretically founded means for optimizing the revenue of auctioneer.
UR - http://www.scopus.com/inward/record.url?scp=84876264299&partnerID=8YFLogxK
U2 - 10.1007/978-3-540-88713-3_5
DO - 10.1007/978-3-540-88713-3_5
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AN - SCOPUS:84876264299
SN - 9783540887126
T3 - Lecture Notes in Business Information Processing
SP - 62
EP - 75
BT - Agent-Mediated Electronic Commerce and Trading Agent Design and Analysis - AAAI 2007 Workshop, TADA 2007, Selected and Revised Papers
PB - Springer Verlag
T2 - 5th Workshop on Trading Agent Design and Analysis, TADA 2007, Co-located with the 22nd AAAI Conference on Artificial Intelligence, AAAI 2007
Y2 - 23 July 2007 through 23 July 2007
ER -