Seminar: On the Inefficiency of Standard Multi-unit Auction Formats

Time: 2pm Tuesday 4 March.

Location: SIT  459 (4 East)

Speaker: Vangelis Markakis, Athens University of Economics and Business, Dept. of Informatics

Title: On the Inefficiency of Standard Multi-unit Auction Formats

Abstract

We study two standard multi-unit auction formats for allocating multiple units of a single good to multi-demand bidders. The first one is the Discriminatory  Price Auction, which charges every winner his winning bids. The second is the Uniform Price Auction, which determines a uniform price to be paid per unit. Variants of both formats find applications ranging from the allocation of bonds to investors, to online sales over the internet, facilitated by popular online brokers.

For these formats, we consider two bidding interfaces: (i) standard bidding, which is most prevalent in the scientific literature, and (ii) uniform bidding, which is the most widely used interface in practical applications.  We evaluate the economic inefficiency of the two formats for both bidding interfaces, by means of upper and lower bounds on the Price of Anarchy for pure equilibria and mixed Bayes-Nash equilibria. Our results for bidders with submodular valuations improve upon bounds that have been obtained in the recent literature.
Moreover, we also consider for the first time bidders with subadditive valuation functions and obtain constant upper bounds there as well.
This is joint work with Bart de Keijzer, Guido Schaefer, Orestis Telelis