Epistemic Reasoning About Rationality and Bids in Auctions

Abstract

In this paper, we investigate strategic reasoning in the context of auctions. More precisely, we establish an explicit link between bidding actions and bounded rationality. To do so, we extend the Auction Description Language with an epistemic operator and an action choice operator and use it to represent a classical auction where agents have imperfect information about other agents' valuations. We formalize bounded rationality concepts in iterative protocols and show how to use them to reason about the players' actions. Finally, we provide a model checking algorithm.