1 / 6

Auctions

Auctions. Hal R. Varian. Auctions. Auctions are very useful mean of price discovery eBay, everyone’s favorite example DoveBid, high value, not so well known Overture and Google sell ads via an auction. Theory. One item to auction off, 1 seller, many buyers

rufus
Download Presentation

Auctions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Auctions Hal R. Varian

  2. Auctions • Auctions are very useful mean of price discovery • eBay, everyone’s favorite example • DoveBid, high value, not so well known • Overture and Google sell ads via an auction

  3. Theory • One item to auction off, 1 seller, many buyers • Private value: independent of others • Common value: everyone has the same value, different information • Common forms: English, Dutch, Sealed bid, Vickrey

  4. Analysis (for private values) • Dutch and sealed bid are “strategically equivalent” since strategy is just determining at what price you will bid • English and Vickrey auctions are strategically equivalent (up to bid increment)

  5. Truthtelling in auctions • Will generally want to bid less than your value in a sealed bid (or Dutch) auction • Will go up to your true value in English auction • What about Vickrey auction?

  6. Vickrey auction • Payoff to 1 = Prob(b1 > b2)[v1 – b2] • If v1 > b2 , want to max Prob(b1>b2) • If v1 < b2 , want to min Prob(b1>b2) • So always want to tell the truth • Like eBay’s proxy bidding agents or Google’s Adwords Discounter

More Related