Mediators in position auctions

Itai Ashlagi, Dov Monderer and Moshe Tennenholtz

Games and Economic Behavior, 2009, vol. 67, issue 1, 2-21

Abstract: A mediator is a reliable entity which plays on behalf of the players who give her the right to play. The mediator acts in a pre-specified way based on messages received from the players. However, a mediator cannot enforce behavior; that is, players can play in the game directly without the mediator's help. A mediator generates a new game for the players, the mediated game. The outcome in the original game of an equilibrium in the mediated game is called a mediated equilibrium. Monderer and Tennenholtz introduced a theory of mediators for games with complete information. We extend the theory of mediators to games with incomplete information, and apply the new theory to position auctions, a central topic in electronic commerce. We provide a minimal set of conditions on position auctions, which is sufficient to guarantee that the VCG outcome function is a mediated equilibrium in these auctions.

Keywords: Mediator; Position; auction; Implementation (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (13)

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