Shill-Proof Auctions

Andrew Komo, Scott Kominers and Tim Roughgarden

Papers from arXiv.org

Abstract: We characterize single-item auction formats that are shill-proof in the sense that a profit-maximizing seller has no incentive to submit shill bids. We distinguish between strong shill-proofness, in which a seller with full knowledge of bidders' valuations can never profit from shilling, and weak shill-proofness, which requires only that the expected equilibrium profit from shilling is non-positive. The Dutch auction (with a suitable reserve) is the unique (revenue-)optimal and strongly shill-proof auction. Any deterministic auction can satisfy only two properties in the set {static, strategy-proof, weakly shill-proof}. Our main results extend to settings with affiliated and interdependent values.

Date: 2024-03, Revised 2025-12
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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