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Multi-Unit Auction Analysis by Means of Agent-Based Computational Economics

In: Artificial Economics

Author

Listed:
  • Asuncion Mochon

    (UNED)

  • Yago Saez

    (Universidad Carlos III de Madrid)

  • David Quintana

    (Universidad Carlos III de Madrid)

  • Pedro Isasi

    (Universidad Carlos III de Madrid)

Abstract

In this paper an agent-based computational economics (ACE) model has been developed in order to test the bidding behavior in a multi-unit auction, the Ausubel auction. The model has been studied in two scenarios. In the first one, bidders have weakly decreasing marginal values and the theory predicts that bidding sincerely is a weakly dominant strategy. The ACE model corroborates this finding. In the second scenario, agents present synergies among their valuations. This scenario has been tested for two environments. In the first one, bidders have the same synergy value, but it differs from one experiment to another. In the second one, bidders within the same experiment exhibit different synergy values. The ACE model finds that underbidding is the most frequent strategy to avoid the exposure problem and maximize bidders’ payoff in the presence of synergies.

Suggested Citation

  • Asuncion Mochon & Yago Saez & David Quintana & Pedro Isasi, 2009. "Multi-Unit Auction Analysis by Means of Agent-Based Computational Economics," Lecture Notes in Economics and Mathematical Systems, in: Cesáreo Hernández & Marta Posada & Adolfo López-Paredes (ed.), Artificial Economics, chapter 0, pages 93-101, Springer.
    • Handle: RePEc:spr:lnechp:978-3-642-02956-1_8
    DOI: 10.1007/978-3-642-02956-1_8
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