Auction Revenue in the General Spiteful-Utility Model

It is well accepted that, in some auctions, a player’s “true utility”may depend not only on the price he pays and whether or not he wins the good, but also on various forms of externalities, such as the prices paid by his competitors, and the identity and true value of the actual winner. In this work, we study revenue generation in single-good auctions under a very general model of externalities: the General Spiteful-Utility Model. Specifically, we • Put forward new revenue benchmarks and solution concepts; • Design new mechanisms when some information about the players’ externalities is known; and • Analyze the revenue of the second-price mechanism when only the players have information about each other. Categories and Subject Descriptors [Theory of computation]: Algorithmic game theory and mechanism design Keywords externality; spitefulness; revenue; single-good auction; undominated strategy; light Bayesian setting

• Type: Journal
• Year: 2016
• Where: INNOVATIONS
• Authors: Jing Chen, Silvio Micali
• Keywords: INNOVATIONS 2016