Revenue Enhancement via Asymmetric Signaling in Interdependent-Value Auctions

Li, Zhuoshu; Das, Sanmay

doi:10.1609/aaai.v33i01.33012093

Cited by 7 publications

(7 citation statements)

References 40 publications

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“…Our work is also related to recent literature on designing signaling schemes to influence bidders' bidding strategy (Emek et al 2012;Badanidiyuru, Bhawalkar, and Xu 2018;Li and Das 2019;Bergemann et al 2022). However, these works also focuses on the auctioneer's revenue.…”

Section: Related Workmentioning

confidence: 82%

The Strange Role of Information Asymmetry in Auctions—Does More Accurate Value Estimation Benefit a Bidder?

Cavallo

2022

AAAI

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We study the second-price auction in which bidders have asymmetric information regarding the item’s value. Each bidder’s value for the item depends on a private component and a public component. While each bidder observes their own private component, they hold different and asymmetric information about the public component. We characterize the equilibrium of this auction game and study how the asymmetric bidder information affects their equilibrium bidding strategies. We also discover multiple surprisingly counter-intuitive equilibrium phenomena. For instance, a bidder may be better off if she is less informed regarding the public component. Conversely, a bidder may sometimes be worse off if she obtains more accurate estimation about the auctioned item. Our results suggest that efforts devoted by bidders to improve their value estimations, as widely seen in today’s online advertising auctions, may not always be to their benefit.

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Section: Related Workmentioning

confidence: 82%

The Strange Role of Information Asymmetry in Auctions—Does More Accurate Value Estimation Benefit a Bidder?

Cavallo

2022

AAAI

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“…Milgrom and Weber [30] lay down the foundation and propose the well-known "Linkage Principle" that shows the expected revenue of an auctioneer can be enhanced when bidders are provided with more information about the item for a better estimate of their values. Nevertheless, it is later shown that such full transparency may not be optimal in the more general settings, no matter if the bidders are symmetrically informed or not [26,22,33]. Specifically, by careful grouping of different auction items through bundling or signaling, the optimization problem of designing the optimal revelation scheme for revenue maximization is shown to be NP-hard [19,9].…”

Section: Related Workmentioning

confidence: 99%

Auctioning with Strategically Reticent Bidders

Wu¹,

Badanidiyuru²,

Xu³

2021

Preprint

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Classic mechanism design often assumes that a bidder's action is restricted to report a type or a signal, possibly untruthfully. In today's digital economy, bidders are holding increasing amount of private information about the auctioned items. And due to legal or ethical concerns, they would demand to reveal partial but truthful information, as opposed to report untrue signal or misinformation. To accommodate such bidder behaviors in auction design, we propose and study a novel mechanism design setup where each bidder holds two kinds of information: (1) private value type, which can be misreported; (2) private information variable, which the bidder may want to conceal or partially reveal, but importantly, not to misreport. We refer to bidders with such behaviors as strategically reticent bidders. Among others, one direct motivation of our model is the ad auction in which many ad platforms today elicit from each bidder not only their private value per conversion but also their private information about Internet users (e.g., their conversion history) in order to improve the platform's estimation of all bidders' conversion rates.We show that in this new setup, it is still possible to design mechanisms that are both Incentive and Information Compatible (IIC). We develop two different black-box transformations, which convert any mechanism M for classic bidders to a mechanism M ′ for strategically reticent bidders, based on either outcome of expectation or expectation of outcome, respectively. We identify properties of the original mechanism M under which the transformation leads to IIC mechanisms M ′ . Interestingly, as corollaries of these results, we show that running VCG with expected bidder values maximizes welfare whereas the mechanism using expected outcome of Myerson's auction maximizes revenue. Finally, we study how regulation on the auctioneer's usage of information may lead to more robust mechanisms.

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“…This task, also known as information design or persuasion [1,2,3,4], has attracted extensive recent interests. Besides the aforementioned problems, it has found application in many other domains including auctions [5,6,7], recommender systems [8,9,10], robot planning [11], traffic congestion control [12,13], security [14,15,16], and recently reinforcement learning [17].…”

Section: Introductionmentioning

confidence: 99%

Algorithmic Information Design in Multi-Player Games: Possibility and Limits in Singleton Congestion

Zhou¹,

Nguyen²,

Xu³

2021

Preprint

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Most algorithmic studies on multi-agent information design so far have focused on the restricted situation with no inter-agent externalities; a few exceptions investigated special game classes such as zero-sum games and second-price auctions but have all focused only on optimal public signaling and exhibit sweepingly negative results. This paper initiates the algorithmic information design of both public and private signaling in a fundamental class of games with negative externalities, i.e., atomic singleton congestion games, with wide application in today's digital economy, machine scheduling, routing, etc.For both public and private signaling, we show that the optimal information design can be efficiently computed when the number of resources is a constant. To our knowledge, this is the first set of computationally efficient algorithms for information design in succinctly representable many-player games. Our results hinge on novel techniques such as developing "reduced forms" to compactly represent players' marginal beliefs. When there are many resources, we show computational intractability results. To overcome the challenge of multiple equilibria, here we introduce a new notion of equilibrium-oblivious NP-hardness, which rules out any possibility of computing a good signaling scheme, irrespective of the equilibrium selection rule.

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Revenue Enhancement via Asymmetric Signaling in Interdependent-Value Auctions

Cited by 7 publications

References 40 publications

The Strange Role of Information Asymmetry in Auctions—Does More Accurate Value Estimation Benefit a Bidder?

The Strange Role of Information Asymmetry in Auctions—Does More Accurate Value Estimation Benefit a Bidder?

Auctioning with Strategically Reticent Bidders

Algorithmic Information Design in Multi-Player Games: Possibility and Limits in Singleton Congestion

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