Abstract
In this paper, we examine a setting in which a number of partially substitutable goods are sold in sequential single unit auctions. Each bidder needs to buy exactly one of these goods. In previous work, this setting has been simplified by assuming that bidders do not know their valuations for all items a priori, but rather are informed of their true valuation for each item right before the corresponding auction takes place. This assumption simplifies the strategies of bidders, as the expected revenue from future auctions is the same for all bidders due to the complete lack of private information. In our analysis we don’t make this assumption. This complicates the computation of the equilibrium strategies significantly. We examine this setting both for first and second-price auction variants, initially when the closing prices are not announced, for which we prove that sequential first and second-price auctions are revenue equivalent. Then we assume that the prices are announced; because of the asymmetry in the announced prices between the two auction variants, revenue equivalence does not hold in this case. We finish the paper, by giving some initial results about the case when free disposal is allowed, and therefore a bidder can purchase more than one item.
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Vetsikas, I.A., Jennings, N.R. (2010). Sequential Auctions with Partially Substitutable Goods. In: David, E., Gerding, E., Sarne, D., Shehory, O. (eds) Agent-Mediated Electronic Commerce. Designing Trading Strategies and Mechanisms for Electronic Markets. AMEC TADA 2009 2009. Lecture Notes in Business Information Processing, vol 59. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-15117-0_17
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DOI: https://doi.org/10.1007/978-3-642-15117-0_17
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-15116-3
Online ISBN: 978-3-642-15117-0
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