Correlated and coarse equilibria of single-item auctions

Michal Feldman; Brendan Lucier; Noam Nisan

doi:10.1007/978-3-662-54110-4_10

Correlated and coarse equilibria of single-item auctions

Michal Feldman, Brendan Lucier, Noam Nisan

Tel Aviv University, The Hebrew University of Jerusalem

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

Abstract

We study correlated equilibria and coarse equilibria of simple first-price single-item auctions in the simplest auction model of full information. Nash equilibria are known to always yield full efficiency and a revenue that is at least the second-highest value. We prove that the same is true for all correlated equilibria, even those in which agents overbid – i.e., bid above their values. Coarse equilibria, in contrast, may yield lower efficiency and revenue. We show that the revenue can be as low as 26% of the second-highest value in a coarse equilibrium, even if agents are assumed not to overbid, and this is tight. We also show that when players do not overbid, the worst-case bound on social welfare at coarse equilibrium improves from 63% of the highest value to 81%, and this bound is tight as well.

Original language	English
Title of host publication	Web and Internet Economics - 12th International Conference, WINE 2016, Proceedings
Editors	Adrian Vetta, Yang Cai
Publisher	Springer Verlag
Pages	131-144
Number of pages	14
ISBN (Print)	9783662541098
DOIs	https://doi.org/10.1007/978-3-662-54110-4_10
State	Published - 2016
Event	12th International Conference on Web and Internet Economics, WINE 2016 - Montreal, Canada Duration: 11 Jun 2016 → 14 Jul 2016

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	10123 LNCS

Conference

Conference	12th International Conference on Web and Internet Economics, WINE 2016
Country/Territory	Canada
City	Montreal
Period	11/06/16 → 14/07/16

All Science Journal Classification (ASJC) codes

Theoretical Computer Science
General Computer Science

Access to Document

10.1007/978-3-662-54110-4_10

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Feldman, M., Lucier, B., & Nisan, N. (2016). Correlated and coarse equilibria of single-item auctions. In A. Vetta, & Y. Cai (Eds.), Web and Internet Economics - 12th International Conference, WINE 2016, Proceedings (pp. 131-144). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 10123 LNCS). Springer Verlag. https://doi.org/10.1007/978-3-662-54110-4_10

Feldman, Michal ; Lucier, Brendan ; Nisan, Noam. / Correlated and coarse equilibria of single-item auctions. Web and Internet Economics - 12th International Conference, WINE 2016, Proceedings. editor / Adrian Vetta ; Yang Cai. Springer Verlag, 2016. pp. 131-144 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).

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abstract = "We study correlated equilibria and coarse equilibria of simple first-price single-item auctions in the simplest auction model of full information. Nash equilibria are known to always yield full efficiency and a revenue that is at least the second-highest value. We prove that the same is true for all correlated equilibria, even those in which agents overbid – i.e., bid above their values. Coarse equilibria, in contrast, may yield lower efficiency and revenue. We show that the revenue can be as low as 26\% of the second-highest value in a coarse equilibrium, even if agents are assumed not to overbid, and this is tight. We also show that when players do not overbid, the worst-case bound on social welfare at coarse equilibrium improves from 63\% of the highest value to 81\%, and this bound is tight as well.",

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Feldman, M, Lucier, B & Nisan, N 2016, Correlated and coarse equilibria of single-item auctions. in A Vetta & Y Cai (eds), Web and Internet Economics - 12th International Conference, WINE 2016, Proceedings. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 10123 LNCS, Springer Verlag, pp. 131-144, 12th International Conference on Web and Internet Economics, WINE 2016, Montreal, Canada, 11/06/16. https://doi.org/10.1007/978-3-662-54110-4_10

Correlated and coarse equilibria of single-item auctions. / Feldman, Michal; Lucier, Brendan; Nisan, Noam.
Web and Internet Economics - 12th International Conference, WINE 2016, Proceedings. ed. / Adrian Vetta; Yang Cai. Springer Verlag, 2016. p. 131-144 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 10123 LNCS).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

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AB - We study correlated equilibria and coarse equilibria of simple first-price single-item auctions in the simplest auction model of full information. Nash equilibria are known to always yield full efficiency and a revenue that is at least the second-highest value. We prove that the same is true for all correlated equilibria, even those in which agents overbid – i.e., bid above their values. Coarse equilibria, in contrast, may yield lower efficiency and revenue. We show that the revenue can be as low as 26% of the second-highest value in a coarse equilibrium, even if agents are assumed not to overbid, and this is tight. We also show that when players do not overbid, the worst-case bound on social welfare at coarse equilibrium improves from 63% of the highest value to 81%, and this bound is tight as well.

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Feldman M, Lucier B, Nisan N. Correlated and coarse equilibria of single-item auctions. In Vetta A, Cai Y, editors, Web and Internet Economics - 12th International Conference, WINE 2016, Proceedings. Springer Verlag. 2016. p. 131-144. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)). doi: 10.1007/978-3-662-54110-4_10

Correlated and coarse equilibria of single-item auctions

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