Auctions, Market Mechanisms and Their Applications. First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers

Research Article

Auctions with Dynamic Populations: Efficiency and Revenue Maximization

Download353 downloads
  • @INPROCEEDINGS{10.1007/978-3-642-03821-1_12,
        author={Maher Said},
        title={Auctions with Dynamic Populations: Efficiency and Revenue Maximization},
        proceedings={Auctions, Market Mechanisms and Their Applications. First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers},
        proceedings_a={AMMA},
        year={2012},
        month={5},
        keywords={Dynamic mechanism design Random arrivals Dynamic Vickrey-Clarke-Groves Sequential ascending auctions},
        doi={10.1007/978-3-642-03821-1_12}
    }
    
  • Maher Said
    Year: 2012
    Auctions with Dynamic Populations: Efficiency and Revenue Maximization
    AMMA
    Springer
    DOI: 10.1007/978-3-642-03821-1_12
Maher Said1,*
  • 1: Yale University
*Contact email: maher.said@yale.edu

Abstract

We study a stochastic sequential allocation problem with a dynamic population of privately-informed buyers. We characterize the set of efficient allocation rules and show that a dynamic VCG mechanism is both efficient and periodic ex post incentive compatible; we also show that the revenue-maximizing direct mechanism is a pivot mechanism with a reserve price. We then consider sequential ascending auctions in this setting, both with and without a reserve price. We construct equilibrium bidding strategies in this indirect mechanism where bidders reveal their private information in period, yielding the same outcomes as the direct mechanisms. Thus, the sequential ascending auction is a natural institution for achieving either efficient or optimal outcomes.