Unformatted text preview: to bound her value. Although the agent can absorb the costs of monitoring the auction and placing bids, the agent cannot easily re ne the user's value for the ight. The value of non-standard and short-supply goods is often subjective, and can depend on many factors that an agent cannot know. However, in an ascending-price auction the agent can bid up to v, and then prompt the user for a more accurate value. Compare this to a sealed-bid auction where the user needs a priori information about the distribution of bids from other agents to make a good decision about how much time to spend deliberating about her value for the ight. The ascending-price auction provides dynamic information on the value of other participants, and can enable the user to avoid deliberation altogether for example if the price increases above an upper bound on value. We compare the performance of three market designs with agents that have hard valuation problems: a posted-price sequential auction; a second-price sealedbid auction; and a rst-price ascending-price auction 12 . In the posted-price auction the seller o ers the good at a xed price to each agent in turn, and 2 does not sell the good if no agent accepts the price. The price is set dynamically in the ascending- and sealed-bid auctions, and we allow the seller to optimize the ask price for distributional information about the values of agents in the posted-price auction. In Section 2 we introduce a simple model for agents with hard valuation problems that allows the derivation of optimal expected-case metadeliberation and bidding strategies for risk-neutral agents in each auction; we describe the optimal strategies in Section 3. Section 4 presents empirical results from simulation, comparing the e ciency and revenue in each auction for di erent numbers of agents and di erent levels of local problem complexity. Finally we discuss related work in auction theory, arti cial intelligence, and economics, before presenting our conclusions. 2 The Valuation Problem
In standard auction theory agents either know their value for a good private values or the value is common across all agents but unknown because of missing information...
View Full Document
- Fall '13