Best-response auctions

Noam Nisan*, Michael Schapira, Gregory Valiant, Aviv Zohar

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

18 Scopus citations

Abstract

We present a new framework for auction design and analysis that we term "best-response auctions". We use this framework to show that the simple and myopic best-response dynamics converge to the VCG outcome and are incentive compatible in several well-studied auction environments (Generalized Second Price auctions, and auctions with unit-demand bidders). Thus, we establish that in these environments, given that all other bidders are repeatedly best-responding, the best course of action for a bidder is to also repeatedly best-respond. Our results generalize classical results in economics regarding convergence to equilibrium and incentive compatibility of ascending-price English auctions. In addition, our findings provide new game-theoretic justifications for some well-studied auction rules. Best-response auctions provide a way to bridge the gap between the full-information equilibrium concept and the usual private-information auction theory.

Original languageAmerican English
Title of host publicationEC'11 - Proceedings of the 12th ACM Conference on Electronic Commerce
Pages351-359
Number of pages9
DOIs
StatePublished - 2011
Event12th ACM Conference on Electronic Commerce, EC'11 - San Jose, CA, United States
Duration: 5 Jun 20119 Jun 2011

Publication series

NameProceedings of the ACM Conference on Electronic Commerce

Conference

Conference12th ACM Conference on Electronic Commerce, EC'11
Country/TerritoryUnited States
CitySan Jose, CA
Period5/06/119/06/11

Keywords

  • auctions
  • best response dynamics

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