Sequential Auctions for the Allocation of Resources with Complementarities
IJCAI '99 Proceedings of the Sixteenth International Joint Conference on Artificial Intelligence
Bidding under uncertainty: theory and experiments
UAI '04 Proceedings of the 20th conference on Uncertainty in artificial intelligence
Combinatorial Auctions
An interactive platform for auction-based allocation of loads in transportation logistics
Proceedings of the 7th international joint conference on Autonomous agents and multiagent systems: industrial track
An options-based solution to the sequential auction problem
Artificial Intelligence
Bidding strategies for realistic multi-unit sealed-bid auctions
AAAI'08 Proceedings of the 23rd national conference on Artificial intelligence - Volume 1
Flexibly priced options: a new mechanism for sequential auction markets with complementary goods
Proceedings of the 9th International Conference on Autonomous Agents and Multiagent Systems: volume 1 - Volume 1
IEEE Transactions on Evolutionary Computation
Using Priced Options to Solve the Exposure Problem in Sequential Auctions
ACM Transactions on Internet Technology (TOIT)
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In this paper we introduce a new option pricing mechanism for reducing the exposure problem encountered by bidding agents with complementary valuations when participating in sequential, second-price auction markets. Existing option pricing models have two main drawbacks: they either apply fixed exercise prices, which may deter bidders with low valuations, thereby decreasing allocative efficiency, or options are offered for free, in which case bidders are less likely to exercise them, thereby reducing seller revenues. The proposed mechanism involving flexibly priced options addresses these problems by calculating the exercise price as well as the option price based on the bids received during an auction. For this new model, which extends and encompasses all the previous models examined, we derive the optimal strategies for a bidding agent with complementary preferences. Finally, we use these strategies to evaluate the proposed option mechanism through Monte-Carlo simutions, and compare it to existing mechanisms, both in terms of the seller revenue and the social welfare. We show that our new mechanism achieves higher market efficiency compared to having no options and free options, while achieving higher revenues for the seller than any existing option mechanism.