 Simultaneous 2nd price item auctions with no-underbiddingMichal Feldman and Galia Shabtai Games and Economic Behavior, 2023, vol. 140, issue C, 316-340 Abstract: The literature on the Price of Anarchy (PoA) of simple auctions employs a no-overbidding assumption but has completely overlooked the no-underbidding phenomenon, which is evident in empirical studies on variants of the second price auction. In this work, we provide a theoretical foundation for the no-underbidding phenomenon. We study the PoA of simultaneous 2nd price auctions (S2PA) under a new natural condition of no underbidding, meaning that agents never bid on items less than their marginal values. We establish improved (mostly tight) bounds on the PoA of S2PA under no-underbidding for different valuation classes, in both full-information and incomplete information settings. Specifically, we show that the PoA is at least 1/2 for general monotone valuations, which extends to Bayesian PoA with arbitrary correlated distributions. We also establish a tight PoA bound of 2/3 for S2PA with XOS valuations, under no-overbidding and no-underbidding, which extends to Bayesian PoA with independent distributions. Keywords: Algorithmic game theory; Simultaneous item bidding auctions; Price of anarchy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:140:y:2023:i:c:p:316-340 DOI: 10.1016/j.geb.2023.03.009 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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