Fraction auctions: The tradeoff between efficiency and running time
AbstractThis paper studies the sales of a single indivisible object where bidders have continuous valuations. In Grigorieva et al.  it was shown that, in this setting, query auctions necessarily allocate inefficiently in equilibrium. In this paper we propose a new sequential auction, called the c-fraction auction. We show the existence of an ex-post equilibrium, called bluff equilibrium, in which bidders behave truthfully except for particular constellations of observed bids at which it is optimal to pretend a slightly higher valuation. We show c-fraction auctions guarantee approximate efficiency at any desired level of accuracy, independent of the number of bidders, when bidders choose to play the bluff equilibrium. We discuss the running time and the efficiency in the bluff equilibrium. We show that by changing the parameter c of the auction we can trade off efficiency against running time.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 220 (2012)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/eor
Query auction; Efficiency; Running time;
Other versions of this item:
- Grigorieva Elena & Herings P. Jean-Jacques & Müller Rudolf & Vermeulen Dries, 2009. "Fraction auctions: the tradeoff between effciency and running time," Research Memorandum 045, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Elena Grigorieva & P. Herings & Rudolf Müller & Dries Vermeulen, 2007.
"The private value single item bisection auction,"
Springer, vol. 30(1), pages 107-118, January.
- Grigorieva,Elena & Herings,Jean-Jacques & Müller,Rudolf & Vermeulen,Dries, 2004. "The communication complexity of private value single item auctions," Research Memorandum 052, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Grigorieva, Elena & Herings, P. Jean-Jacques & Müller, Rudolf & Vermeulen, Dries, 2006.
"Inefficiency of equilibria in query auctions with continuous valuations,"
017, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Grigorieva Elena & Herings P. Jean-Jacques & Müller Rudolf & Vermeulen Dries, 2009. "Inefficiency of equilibria in query auctions with continuous valuations," Research Memorandum 023, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Engelbrecht-Wiggans, Richard & Kahn, Charles M., 1991.
"Protecting the winner : Second-price versus oral auctions,"
Elsevier, vol. 35(3), pages 243-248, March.
- Engelbrecht-Wiggans, R. & Kahn, C.M., 1990. "Protecting the Wnner: Second-price Versus Oral Auctions," University of Chicago - Economics Research Center 90-8, Chicago - Economics Research Center.
- Chwe, Michael Suk-Young, 1989. "The discrete bid first auction," Economics Letters, Elsevier, vol. 31(4), pages 303-306, December.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.