Bidding optimally in concurrent second-price auctions of perfectly substitutable goods

We derive optimal bidding strategies for a global bidding agent that participates in multiple, simultaneous second-price auctions with perfect substitutes. We first consider a model where all other bidders are local and participate in a single auction. For this case, we prove that, assuming free disposal, the global bidder should always place non-zero bids in all available auctions, irrespective of the local bidders’ valuation distribution. Furthermore, for non-decreasing valuation distributions, we prove that the problem of finding the optimal bids reduces to two dimensions. These results hold both in the case where the number of local bidders is known and when this number is determined by a Poisson distribution. This analysis extends to online markets where, typically, auctions occur both concurrently and sequentially. In addition, by combining analytical and simulation results, we demonstrate that similar results hold in the case of several global bidders, provided that the mar...

• Type: Conference
• Year: 2007
• Where: ATAL
• Authors: Enrico H. Gerding, Rajdeep K. Dash, David C. K. Yuen, Nicholas R. Jennings
• Keywords: ATAL 2007, Global Bidder, Local Bidders, Simultaneous Second-price Auctions