Competitive auctions

Andrew V. Goldberg, Jason D. Hartline*, Anna R. Karlin, Michael Saks, Andrew Wright

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

164 Scopus citations

Abstract

We study a class of single-round, sealed-bid auctions for an item in unlimited supply, such as a digital good. We introduce the notion of competitive auctions. A competitive auction is truthful (i.e. encourages bidders to bid their true valuations) and on all inputs yields profit that is within a constant factor of the profit of the optimal single sale price. We justify the use of optimal single price profit as a benchmark for evaluating a competitive auctions profit. We exhibit several randomized competitive auctions and show that there is no symmetric deterministic competitive auction. Our results extend to bounded supply markets, for which we also give competitive auctions.

Original languageEnglish (US)
Pages (from-to)242-269
Number of pages28
JournalGames and Economic Behavior
Volume55
Issue number2
DOIs
StatePublished - May 2006

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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