Optimal Auction Design for Agents with Hard Valuation Problems

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Optimal Auction Design for Agents with Hard Valuation Problems

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Title: Optimal Auction Design for Agents with Hard Valuation Problems
Author: Parkes, David C.
Citation: Parkes, David C. 2000. Optimal auction design for agents with hard valuation problems. In Agent mediated electronic commerce II: Towards next-generation agent-based electronic commerce systems, ed. A. Moukas, C. Sierra, and F. Ygge, 206-219. Berlin; New York: Springer. Previously published in Lecture Notes in Computer Science 1788: 206-219.
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Abstract: As traditional commerce moves on-line more business transactions will be mediated by software agents, and the ability of agent-mediated electronic marketplaces to efficiently allocate resources will be highly dependent on the complexity of the decision problems that agents face; determined in part by the structure of the marketplace, resource characteristics, and the nature of agents’ local problems. We compare auction performance for agents that have hard local problems, and uncertain values for goods. Perhaps an agent must solve a hard optimization problem to value a good, or interact with a busy and expensive human expert. Although auction design cannot simplify the valuation problem itself, we show that good auction design can simplify meta-deliberation - providing incentives for the “right” agents to deliberate for the “right” amount of time. Empirical results for a particular cost-benefit model of deliberation show that an ascending-price auction will often support higher revenue and efficiency than other auction designs. The price provides agents with useful information about the value that other agents hold for the good.
Published Version: doi:10.1007/10720026_11
Other Sources: http://www.eecs.harvard.edu/econcs/pubs/springer-valuation.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:4101698
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