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.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 220 (2012)
Issue (Month): 2 ()
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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.:
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- 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).
- Elena Grigorieva & P. Herings & Rudolf Müller & Dries Vermeulen, 2007.
"The private value single item bisection auction,"
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