Online auctions for bidders with interdependent values

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. Categories and Subject Descriptors J.4 [Social and Behavioral Sciences]: Economics General Terms Economics, Theory Keywords Interdependent, Dynamic Auctions, Incentive Compatibility

• Type: Conference
• Year: 2007
• Where: ATAL
• Authors: Florin Constantin, Takayuki Ito, David C. Parkes
• Keywords: ATAL 2007, IDV Bidders, Incentive Compatibility, Model Allowing Bidders