Auction Theory from the Bidder Standpoint

Suju Rajan, Noureddine El Karoui

Abstract: Much of classical auction theory has been developed from the standpoint of the seller, trying to understand how to optimize auctions to maximize seller revenue for instance. This is still a source of very active current research. Billions of auctions are now run on the Internet everyday between the same sellers and bidders and this creates a need to better understand auctions from the bidders’ perspective. In this talk we will present some recent results on this question, showing for instance that auctions that are reputed to be truthful are not truthful anymore when the seller optimizes the auction format based on bidders’ past bids, provide explicit and simple to implement shading strategies that improve bidders’ utility (on and off equilibrium) and are robust to various forms of estimation error and mechanism changes. We will also discuss various equilibrium questions. We take a mostly functional analytic point of view on these problems. If time permits, we will discuss ongoing work on a machine-learning-based perspective. Joint work with Thomas Nedelec, Marc Abeille, Clément Calauzènes, Benjamin Heymann and Vianney Perchet while doing research at Criteo. Comments var disqus_config