Auctions,IV.S.Subrahmanian1AuctionTypesl Ascendingauctions(English)l Descendingauctions(Dutch)l VickreyAuctionsl Multi-unitAuctionsl Otherstobecoveredlater– Combinatorialauctions– Spectrumauctions2Fall2002,©V.S.SubrahmanianAuctiongoalsl Maximizerevenuesforauctioneer.l Rewardbidderwiththehighestvaluationfortheproduct.3Fall2002,©V.S.SubrahmanianAscending(English)auctionsl Allbiddersareinitiallyactive.l Startpriceandincrementarefixed.l Ateachstageofthebidding:– Auctioneercallsoutlastprice+increment– Zeroormorebiddersmaybecomeinactive– Ifatleast2biddersarestillactive,auctionproceedstothenextstage.– Ifonlyoneauctioneerisactive,thenhewinsatthecurrentprice.4Fall2002,©V.S.SubrahmanianAscendingauctionexamplel John’swillingtopay$50foritemA.l Jill’swillingtopay$40foritemA.l Mary’swillingtopay$45.l Startprice=$30,increment=$10.l $30:John,Jill,Maryactive.l $40:John,Jill,Maryactivel $50:OnlyJohnisactive=>WINSandPAYS$50.5Fall2002,©V.S.SubrahmanianDescendingauctionsl Allbiddersareinitiallyinactive.l Startpriceanddecrementarefixed.l Ateachstageofthebidding:– Auctioneercallsoutlastprice-decrement– Ifatleastonebiddersaysyes,thenthefirstbiddertorespondwinsatthecurrentprice.– Elseauctioneerproceedstothenextround.6Fall2002,©V.S.SubrahmanianDescendingauctionexamplel John’swillingtopay$50foritemA.l Jill’swillingtopay$40foritemA.l Mary’swillingtopay$45.l Startprice=$60,increment=$10.l $60:John,Jill,Maryinactive.l $50:Johnactivel JohnWINSandPAYS$50.7Fall2002,©V.S.SubrahmanianObservationsl Inbothcases,thepersonwillingtobidthemostwins.l Inbothcases,thewinnerpaysthecurrent(winning)price.8Fall2002,©V.S.SubrahmanianVickreyauctionsl Sameasascendingauctionexceptforonedifference.l Winnerpaystheamountbidbythe2ndhighestbidder.9Fall2002,©V.S.SubrahmanianVickreyauctionexamplel John’swillingtopay$50foritemA.l Jill’swillingtopay$40foritemA.l Mary’swillingtopay$45.l Startprice=$30,increment=$10.l