Dütting, Paul, Fischer, Felix and Parkes, David C. (2019) Expressiveness and robustness of first-price position auctions. Mathematics of Operations Research, 44 (1). pp. 196-211. ISSN 0364-765X
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Abstract
Ideally, the properties of an economic mechanism should hold in a robust way across multiple equilibria and under varying assumptions regarding the information available to participants. Focusing on the design of robust position auctions, we seek mechanisms that possess an efficient equilibrium and guarantee high revenue in every efficient equilibrium, under complete and incomplete information. A generalized first-price auction that is expressive in the sense of allowing multidimensional bids turns out to be the only standard design able to achieve this goal, even when valuations are one dimensional. The equilibria under complete information are obtained via Bernheim and Whinston’s profit target strategies, those under incomplete information via an appropriate generalization thereof. Particularly interesting from a technical perspective is the incomplete information case, where the standard technique for establishing equilibrium existence due to Myerson is generalized to a setting in which the bid space has higher dimension than the valuation space.
| Item Type: | Article |
|---|---|
| Official URL: | https://pubsonline.informs.org/journal/moor |
| Additional Information: | © 2018 INFORMS |
| Divisions: | Mathematics |
| Subjects: | H Social Sciences > HB Economic Theory Q Science > QA Mathematics |
| Date Deposited: | 29 Nov 2017 14:58 |
| Last Modified: | 12 Dec 2024 01:35 |
| URI: | http://eprints.lse.ac.uk/id/eprint/85877 |
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