Online auctions for bidders with interdependent values
Online auctions for bidders with interdependent values
Florin Constantin,Takayuki Ito,D. Parkes
TLDR
It is shown that if bidders can misreport departure times and private signals, no reasonable auction can be IC and a reasonable IC auction is presented for the case where b biders cannot misreport departures.
Abstract
Interdependent values (IDV) is a valuation model allowing bidders in an auction to express their value for the item(s) to sell as a function of the other bidders' information. We investigate the incentive compatibility (IC) of single-item auctions for IDV bidders in dynamic environments. We provide a necessary and sufficient characterization for IC in this setting. We show that if bidders can misreport departure times and private signals, no reasonable auction can be IC. We present a reasonable IC auction for the case where bidders cannot misreport departures.