Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. Artificial Intelligence, 120(1):29--42, 2000.  Home/Search   Document Details and Download   Summary   Related Articles   Check

....scientists have long realized the importance of auctions and exchanges, and studied a variety of trading models. The related computer science research has been focused on e ective auction systems [ Bichler, 2000b; Ronen, 2001 ] optimal matching in various auctions [ Ygge and Akkermans, 1997; Monderer and Tennenholtz, 2000 ] bidding strategies [ Tesauro and Das, 2001 ] and general purpose systems for auctions and exchanges. It has led to successful Internet auctions, such as eBay (www.ebay.com) and Yahoo Auctions (auctions.yahoo.com) Recently, researchers have developed several combinatorial auctions, which ....

Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. Arti cial Intelligence, 120:29-42, 2000. 70

....auctions, and general combinatorial auctions. key words : dynamic programming, combinatorial auction, spectrum auction, secret sharing 1 Introduction Internet auctions have become an especially popular part of Electronic Commerce. Some studies on Internet auctions have already been conducted [18, 34], and combinatorial auctions have recently attracted considerable attention [8, 13 15, 26, 27, 36] In contrast with conventional auctions that sell a single item at a time, combinatorial auctions sell multiple items with interdependent values simultaneously and allow the bidders to bid on any ....

Monderer, D. and Tennenholtz, M.: Optimal Auctions Revisited, Proceedings of the Fifteenth National Conference on Artificial Intelligence (AAAI-98) (1998) 32--37

....the seller s problem of deciding which bids to accept becomes harder, as different bidders can make up their own bundle on which they bid on . Recently, there has been a lot of interest in this problem because of its applicability in Internet based auctions, B2B exchanges, and multi agent systems [16, 7]. There have been several papers [12, 13, 2, 4, 6, 15, 10] that analyze this problem and present algorithms and techniques to solve it and a few of its generalizations. One starting point that guides research on this is the result from [10] which shows the problem of finding the optimal set of ....

D. Monderer and M. Tennenholtz. Optimal auctions revisited. Artificial Intelligence, 2000.

....a simulation, we show that our method can obtain a social surplus that is very close to optimal. 1 Introduction Internet auctions have become an especially popular part of Electronic Commerce (EC) Various theoretical and practical studies on Internet auctions have already been conducted [Monderer and Tennenholtz, 1998; Wurman et al. 1998] Among these studies, those on combinatorial auctions have lately attracted considerable attention [Fujishima et al. 1999; Leyton Brown et al. 2000; Klemperer, 1999; Sandholm, 1999; Lehmann et al. 1999 ] Although conventional auctions sell a single item at a time, ....

Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. In Proceedings of the Fifteenth National Conference on Artificial Intelligence (AAAI-98), pages 32--37, 1998.

....http: www.kecl.ntt.co. jp csl ccrg members matubara (Shigeo Matsubara) to appear Artificial Intelligence 1 Introduction Internet auctions havebecomeanespecially popular part of Electronic Commerce (EC) Various theoretical and practical studies on Internet auctions have already been conducted [6,10,13]. Among these studies, those on combinatorial auctions have lately attracted considerable attention [2,3,8,11] Although conventional auctions sell a single good at a time, combinatorial auctions sell multiple goods with interdependentvalues simultaneously and allowthebidders to bid on ....

D. Monderer, M. Tennenholtz, Optimal auctions revisited, in: Proceedings of the Fifteenth National Conference on Artificial Intelligence (AAAI-98), 1998, pp. 32--37.

....socially desirable collective decision is called a mechanism design problem. Mechanism design is an active research area in economics (Mas Colell, Whinston, Green 1995) and the obtained results have been applied to computer science, in particular, negotiation problems among computational agents (Monderer Tennenholtz 1998; Rosenschein Zlotkin 1994; Sandholm 1996; Walsh et al. 1998) In existing studies on mechanism design problems, it is commonly assumed that the designer of a mechanism can identify the participants of the mechanism. This assumption, however, does not hold when considering a collective decision ....

Monderer, D., and Tennenholtz, M. 1998. Optimal auctions revisited. In Proceedings of the Fifteenth National ConferenceonArtificial Intelligence (AAAI-98), 32--37.

.... where mechanism design theory has also been applied in computational settings include resource and task allocation problems [77, 117, 116] communication networks [19, 46] multi agent systems [91, 120, 16] and others [114, 50, 20, 103, 56] Various aspects of mechanism design were studied at [69, 68, 50, 102]. The amount of communication required by distributed mechanisms for cost sharing was studied at [19] This recent paper investigates two ingredients absent in this thesis a distributed model and budget balance requirement. These two fundamental aspects are surely to play a signi cant role in ....

Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. In Proceedings of the Fifteenth National Conference on Articial Intelligence (AAAI-98), 1998.

.... cases where mechanism design models were applied to computational problems include resource and task allocation problems [25, 39, 38] communication networks [5, 14, 13] multi agent systems [30, 40, 4] and others [37, 15, 6, 34, 17] Several aspects of mechanism design were recently studied in [22, 21, 15, 33]. The computational aspect of mechanisms for cost sharing was studied at [5] This recent paper investigates two ingredients absent from this work a distributed model and budget balance requirement. These two fundamental aspects are surely to play a signi cant role in future research in this ....

Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. In Proceedings of the Fifteenth National Conference on Articial Intelligence (AAAI-98), 1998.

....of the solution does not rely on approximating the infinite trees with finite ones. The method can be used, for example, to analyze the expected revenue of alternative auction forms. 1 Introduction Auctions have been a subject of continuous interest in multiagent systems and electronic commerce [Monderer and Tennenholtz, 1998; Sandholm, 1996] The allocative efficiency of auctions ensures their pervasive use in electronic markets. One of the main advantages of auctions as a form of market organization is their ability to cope with market imperfections. The most typical imperfections of electronic markets are the small ....

....and the existence of incomplete and asymmetric information. Usually in electronic commerce and multiagent systems, an auctioneer faces several possible buyers and has imperfect information about how much the buyers might be willing to pay. The problem of the optimal auction design [Myerson, 1981; Monderer and Tennenholtz, 1998] is to set up such auction rules that give the seller the highest possible utility. Most theoretical results on optimal auction design draw crucially on the revenue equivalence theorem [Vickrey, 1961] According to the theorem, the firstprice sealed bid, second price sealed bid, English and Dutch ....

Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. Proceedings of the Fifteenth National Conference on Artificial Intelligence, pages 32--37, 1998.

....as a rst attempt to formalize strategic buyers clubs , where participants may cheat about their valuations and so the club s protocol must be designed carefully enough to account for this possibility. The study of bidding clubs is complementary to the rich work on ecient market design [4, 1, 6]. Bidding clubs take the agents perspective in improving their situation in existing markets, rather than taking a center s perspective on optimal, revenue maximizing market design. 9. ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. Arti cial Intelligence, forthcoming, 2000.

....section we provide the reader with the requisite knowledge of auction theory, including several specific well studied basic auction mechanisms. Some of the technical and conceptual assumptions we take are presented in this section. 2. 1 Framework and principles Following Monderer and Tennenholtz [4] we now present some background of auction theory which is necessary for this paper. Consider a seller who wishes to sell a particular good, where there are n agents denoted by 1; 2; n who wish to buy this good. An auction is a procedure in which participants submit messages (typically ....

....Dutch auction makes participation rational and requires only one additional bit, so we get a communication complexity of two bits. The fact we approach the optimal revenue is a direct implication of the revenue equivalence principle [5] and the results on the asymptotic revenue in auctions [4]. 7 Conclusion In this paper we introduced the notion of rational computability in distributed systems, and studied the communication complexity of rational computation. We believe that this work bridges part of the gap between work in computer science (where issues such as communication ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. Artificial Intelligence, forthcoming, 2000.

....for surveys) The study of auctions has recently been facilitated by the famous FCC auction [3, 18, 21, 20] as well as by the huge popularity of them as an electronic commerce tool. As a result, in the recent years, there is an explosion in papers by AI researchers dealing with auctions (see [37, 5, 26, 1, 44, 12, 46, 32, 31, 30] for some, not necessarily completely representative, pointers) A central issue in the related line of research is that of winner determination, the selection of agents bids that will maximize the social surplus. Many of the algorithms that have been designed assume that agents bids reflect ....

....in R1 is almost achieved by the Clarke Mechanism if the number of agents is sufficiently large. Our method of proof of R2 shows that: ffl R3 The rate of convergence in R2 depends on the number of goods k, and on the distribution of types, but not on the utility functions. Our results generalize [26]. In [26] we proved R1 for a single good model (satisfying A1 A4) and we proved a weaker version of R2 for a single good model. In this weaker version (which was independently proved by Neeman [28] we established that the ratio between the expected revenue and the expected maximal surplus ....

[Article contains additional citation context not shown here]

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. Artificial Intelligence, 120(1):29--42, 2000.

....as a first attempt to formalize strategic buyers clubs , where participants may cheat about their valuations and so the club s protocol must be designed carefully enough to account for this possibility. The study of bidding clubs is complementary to the rich work on e#cient market design [4, 1, 6]. Bidding clubs take the agents perspective in improving their situation in existing markets, rather than taking a center s perspective on optimal, revenue maximizing market design. 9. ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. Artificial Intelligence, forthcoming, 2000.

.... the wide popularity of auctions on the Internet and the emergence of electronic commerce, where auctions serve as the most popular game theoretic mechanism, efficient auction design has become a subject of considerable importance for researchers in multi agent systems (e.g. Wellman et al. 1998; Monderer Tennenholtz 2000)) Of particular interest are multi object auctions where the bids name bundles of goods, called combinatorial auctions (CA) For example, imagine an auction of used electronic equipment. A bidder may wish to bid x for a particular TV and y for a particular VCR, but z 6= x y for the pair. In ....

Monderer, D., and Tennenholtz, M. 2000. Optimal Auctions Revisited. Artificial Intelligence, forthcoming.

....as a rst attempt to formalize strategic buyers clubs , where participants may cheat about their valuations and so the club s protocol need to be designed carefully enough to account for this possibility. The study of bidding clubs is complementary to the rich work on ecient market design [4, 1, 5]. Bidding clubs take the agents perspective in improving their situation in existing markets, rather than taking a center s perspective on optimal, revenue maximizing market design. ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. Articial Intelligence, forthcoming, 2000.

....complexity of rational computation. 2 A mini primer on auction theory In this section we provide the reader with the requisite knowledge of auction theory, including several specific well studied basic auction mechanisms. 2. 1 Framework and principles Following Monderer and Tennenholtz [4] we now present some background of auction theory which is necessary for this paper. Consider a seller who wishes to sell a particular good, where there are n agents denoted by 1; 2; n who wish to buy this good. An auction is a procedure in which participants submit messages (typically ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. In Proceedings of AAAI-98, 1998.

....and budget balance properties. Our result enables to extend the central protocol of the theory of mechanism design to the context of resource bounded agents. 1 Introduction Recent work in Artificial Intelligence has dealt extensively with economic and game theoretic mechanisms (e.g. [12, 9, 14, 17, 11]) The theory of mechanism design deals with the design of protocols to be used in noncooperative environments. In many cases, the objective of these protocols is the optimization of social welfare. The idea is that a center takes care of an interaction in which the agents have different worth ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. In Proceedings of AAAI-98, 1998.

....not rely on standard protocol design; we have to design protocols that are incentive compatible. In order to handle the above problem the theory of mechanism design has to be adapted to computational environments, i.e. to the context of distributed computing. In a typical mechanism design setup [7, 9, 11], a center attempts to perform some task, or to arrive at some decision, based on information available to a set of agents. The major problem is that the agents might not supply the desired information to the center, and might cheat the center in order to increase their individual payoffs. The ....

D. Monderer and M. Tennenholtz. Optimal Auctions Revisited. In Proceedings of AAAI-98, 1998.

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Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. Artificial Intelligence, 120(1):29--42, 2000.

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D. Monderer and M. Tennenholtz, "Optimal auctions revisited," in Proc. Fifteenth National Conf. on Artificial Intelligence, 1998, pp. 32--37.

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Dov Monderer and Moshe Tennenholtz. Optimal auctions revisited. In Proceedings of the Fifteenth National Conference on Artificial Intelligence (AAAI-98), 1998.

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