TY - GEN
T1 - Fragility and robust design of optimal auctions
AU - Kotsalis, Georgios
AU - Shamma, Jeff S.
N1 - Copyright:
Copyright 2018 Elsevier B.V., All rights reserved.
PY - 2013
Y1 - 2013
N2 - We consider the fragility problem of optimal auctions under a general class of preference relations and type spaces. We show that in generic settings feasibility of optimal auctions relies on the principals exact knowledge of the preference relations of the bidders. In the absence of such exact knowledge, a self-interested bidder will find it profitable to either misreport her private information or not participate at the auction. This phenomenon is a manifestation of fragility. Given this limitation we design auctions that are robust to model misspecification by leveraging tools from robust optimization, while maintaining computational tractability.
AB - We consider the fragility problem of optimal auctions under a general class of preference relations and type spaces. We show that in generic settings feasibility of optimal auctions relies on the principals exact knowledge of the preference relations of the bidders. In the absence of such exact knowledge, a self-interested bidder will find it profitable to either misreport her private information or not participate at the auction. This phenomenon is a manifestation of fragility. Given this limitation we design auctions that are robust to model misspecification by leveraging tools from robust optimization, while maintaining computational tractability.
UR - https://www.scopus.com/pages/publications/84897677676
UR - https://www.scopus.com/pages/publications/84897677676#tab=citedBy
U2 - 10.1109/Allerton.2013.6736531
DO - 10.1109/Allerton.2013.6736531
M3 - Conference contribution
AN - SCOPUS:84897677676
SN - 9781479934096
T3 - 2013 51st Annual Allerton Conference on Communication, Control, and Computing, Allerton 2013
SP - 248
EP - 253
BT - 2013 51st Annual Allerton Conference on Communication, Control, and Computing, Allerton 2013
PB - IEEE Computer Society
T2 - 51st Annual Allerton Conference on Communication, Control, and Computing, Allerton 2013
Y2 - 2 October 2013 through 4 October 2013
ER -