A Learning Approach to Auctions

Hon-Snir, Shlomit; Monderer, Dov; Sela, Aner

doi:10.1006/jeth.1998.2419

Cited by 46 publications

(20 citation statements)

References 19 publications

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“…We extend the literature by also studying incomplete information environments. In this respect, there is also a small related literature on the stability of equilibria for different auction and double auction formats (including Hon-Snir et al, 1998;Dawid, 1999;Saran and Serrano, 2010).…”

Section: Related Literaturementioning

confidence: 99%

Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms

Cabrales

Serrano

2011

Games and Economic Behavior

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a b s t r a c t JEL classification: C72 D70 D78 Keywords: Robust implementation Bounded rationality Evolutionary dynamics MechanismsWe study the classic implementation problem under the behavioral assumption that agents myopically adjust their actions in the direction of better-responses or bestresponses. First, we show that a necessary condition for recurrent implementation in better-response dynamics (BRD) is a small variation of Maskin monotonicity, which we call quasimonotonicity. We also provide a mechanism for implementation in BRD if the rule is quasimonotonic and excludes worst alternatives -no worst alternative (NWA). Quasimonotonicity and NWA are both necessary and sufficient for absorbing implementation in BRD. Moreover, they characterize implementation in strict Nash equilibria. Under incomplete information, incentive compatibility is necessary for any kind of stable implementation in our sense, while Bayesian quasimonotonicity is necessary for recurrent implementation in interim BRD. Both conditions are also essentially sufficient for recurrent implementation, together with a Bayesian NWA. A characterization of implementation in strict Bayesian equilibria is also provided. Partial implementation results are also obtained.

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Section: Related Literaturementioning

confidence: 99%

Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms

Cabrales

Serrano

2011

Games and Economic Behavior

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“…Hon-Snir et al [14], Hahn [10], Sela [30], Cressman [6], and Berger [1]. Others have found classes of games where fictitious play need not converge, e.g.…”

Section: Preprint Submitted To Jetmentioning

confidence: 99%

Brown's original fictitious play

Berger

2007

Journal of Economic Theory

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“…[6] estimates the bid distribution directly and, for risk-averse auction agents with concave exponential utility functions, could then use this information to obtain the valuation distribution. [7] uses fictitious play to obtain the optimal bidding strategy directly without having to estimate the valuation distribution but does so only for auction agents that maximize the expected profit.…”

Section: Estimating the Valuation Distributionsmentioning

confidence: 99%

Risk-averse auction agents

Liu¹,

Goodwin²,

Koenig³

2003

Proceedings of the Second International Joint Conference on Autonomous Agents and Multiagent Systems - AAMAS '03

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Auctions are an important means for purchasing material in the era of e-commerce. Research on auctions often studies them in isolation. In practice, however, auction agents are part of complete supply-chain management systems and have to make the same decisions as their human counterparts. To address this issue, we generalize results from auction theory in three ways. First, auction theory provides the optimal bidding function for the case where auction agents want to maximize the expected profit. Since companies are often risk-averse, we derive a closed form of the optimal bidding function for auction agents that maximize the expected utility of the profit for concave exponential utility functions. Second, auction theory often assumes that auction agents know the bidder's valuation of an auctioned item. However, the valuation depends on how the item can be used in the production process. We therefore develop theoretical results that enable us to integrate our auction agents into production-planning systems to derive the bidder's valuation automatically. Third, auction theory often assumes that the probability distribution over the competitors' valuations of the auctioned item is known. We use simulations of the combined auction-and production-planning system to obtain crude approximations of these probability distributions automatically. The resulting auction agents are part of a complete supply-chain management system and seamlessly combine ideas from auction theory, utility theory, and dynamic programming.

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A Learning Approach to Auctions

Cited by 46 publications

References 19 publications

Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms

Implementation in adaptive better-response dynamics: Towards a general theory of bounded rationality in mechanisms

Brown's original fictitious play

Risk-averse auction agents

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