Putting Auction Theory to Work: The Simultaneous Ascending Auction

Milgrom, Paul

doi:10.1017/9781316471609.002

Cited by 177 publications

(252 citation statements)

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“…Most combinatorial auction work assumes the existence of combinatorial auction markets which sell a full range of product bundles (Sandholm 2002;Rothkopf 1994). Recent years have also seen the increasing acceptance of simultaneous ascending auctions in selected applications (Milgrom 2000). Such auctions can be viewed as staged, simultaneously-run English auctions and can mitigate some of the problems with full-fledged combinatorial auctions following, e.g., the Groves-Clarke pivot mechanism.…”

Section: Related Workmentioning

confidence: 99%

“…As a result, the decision on whether an item (e.g., a particular database system) should be purchased depends on not only its own price, terms of service contracts, etc., but also other potentially relevant items. Two other widely-cited examples of combinatorial interdependencies are: the value of owning a take-off time slot at an airport which depends on whether compatible landing slots can be acquired at other airports (Rassenti et al 1982), and licenses for bands of the broadcast spectrum in different geographical areas (Milgrom 2000).…”

Section: Introductionmentioning

confidence: 99%

“…Our work, on the other hand, focuses on challenges arising from bundling and combinatorial interdependency considerations. Compared with the existing literature on combinatorial interdependencies and related market designs [e.g., (McAfee et al 1989;Milgrom 2000;Sandholm 2002;Jones and Koehler 2002;Rothkopf 1994)], our work makes different assumptions regarding the underlying marketplace where procurement operations are conducted. The existing literature typically assumes that the seller offers multiple bundles of goods and can design and enforce customized market exchange rules such as various types of combinatorial auctions through which potential buyers interact and transact.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Coordination of purchasing and bidding activities across posted offer and auction markets

Zeng

Cox

Dror

2006

ISeB

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In both consumer purchasing and industrial procurement, combinatorial interdependencies among the items to be purchased are commonplace. E-commerce compounds the problem by providing more opportunities for switching suppliers at low costs, but also potentially eases the problem by enabling automated market decision-making systems, commonly referred to as trading agents, to make purchasing decisions in an integrated manner across markets. We are investigating a new approach to deal with the combinatorial interdependency challenges for online markets. This approach relies on existing commercial online market institutions such as posted-offer markets and various online auctions that sell single items. It uses trading agents to coordinate a buyer's purchasing and bidding activities across multiple online markets simultaneously to achieve the best overall procurement effectiveness. This paper presents two sets of models related to this approach. The first set of models formalizes optimal purchasing decisions across posted-offer markets with fixed transaction costs. The second set of models is concerned with the coordination of bidding activities across multiple online auctions.

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Section: Related Workmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Coordination of purchasing and bidding activities across posted offer and auction markets

Zeng

Cox

Dror

2006

ISeB

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“…This work began with Coase (1959) and is eloquently reviewed by McMillan (1994). In Milgrom (2000), simultaneous ascending auctions are developed for the sale of primary radio spectrum licenses where bidding behavior will depend on whether or not the bidder thinks the licenses are substitutes for each other or complements. However, there is a lack of economics literature on the sale of secondary spectrum rights.…”

Section: Introductionmentioning

confidence: 99%

Two ways to auction off an uncertain good

Watts

2016

J. Econ.

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An auction framework is examined where each seller is uncertain about whether or not he will have a good available to sell. A timely example includes the auctioning off of radio spectrum by licensed primary users to unlicensed secondary users. A licensed primary user may not use the spectrum all of the time, but may not know in advance whether or not he will need the spectrum himself and thus whether or not he will have spectrum bandwidth available to rent out. We consider two types of auctions: an ex-post auction which takes place after each seller learns about the availability of the good and an ex-ante auction which takes place before each seller learns about availability. The expected payoffs to buyers, sellers, and to society are then compared. The ex-ante auction can cause buyers to bid on multiple expected units to ensure that they end up with at least one actual unit. Such over purchasing can create a loss to society. Sellers will prefer the ex-post auction since if fewer units are actually available to sell, then they can be sold at a higher price. Whereas in the ex-ante auction all sellers have one expected unit available to sell which results in a lower price. However, if high value buyers are common, then a buyer may prefer the ex-ante auction as it can be easier to win an expected unit than an ex-post actual unit. In contrast, if a buyer has a high valuation and if high value buyers are uncommon, then he may prefer the ex-post auction since he has a strong chance to win an actual unit.

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“…Milgrom [14] examined simultaneous ascending auctions for substitutes in the context of FCC auctions [8]. He considered a multi-round sealed bid auction for multiple items and showed that if the bidders bid honestly, then the maximum inefficiency is bounded by a quantity equal to times the sum of the components of the final price vector (where is the minimum required bid increment expressed as a fraction of the current price).…”

Section: Introductionmentioning

confidence: 99%

Simultaneous Independent Online Auctions with Discrete Bid Increments

Bansal

Garg

2005

Electron Commerce Res

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Decentralized multi-item auctions offer great opportunities for integrating fragmented online auction markets into larger markets with more efficient outcomes. This paper extends the theory of multi-item ascending auctions of substitutes by considering any finite positive bid increment and allowing the bidders to bid asyn-chronously instead of bidding in a round-robin fashion. We consider a setup where the bidders' utilities over multiple items are additive and bound the maximum inefficiency in the allocation when the bidders follow a simple greedy strategy. We also obtain the limits within which the prices of individual items can vary from one outcome to another. For the special case of single unit bidder demand, we also bound the maximum surplus which a bidder can extract by unilaterally switching to some other strategy. The paper suggests an upper bound for the minimum required bid increment which would be necessary for competitive price discovery and truthful bidding in a practical online implementation.

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Putting Auction Theory to Work: The Simultaneous Ascending Auction

Cited by 177 publications

References 1 publication

Coordination of purchasing and bidding activities across posted offer and auction markets

Coordination of purchasing and bidding activities across posted offer and auction markets

Two ways to auction off an uncertain good

Simultaneous Independent Online Auctions with Discrete Bid Increments

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