Asymmetric Spite in Auctions

14 years 19 days ago

Download www.cs.cmu.edu

In many auctions, agents bid more aggressively than selfinterest would prescribe. This can be explained by spite, where the agent's utility not only increases in the agent's surplus but also decreases as the other bidders' surpluses increase. Spite can stem from long-term benefits from making competitors worse off and from inherent psychological effects. There have been important recent game-theoretic analyses of spiteful bidding assuming all agents are equally spiteful. We present, to our knowledge, the first auction analysis in the more realistic setting where bidders may be spiteful to different extents. We show that the equilibrium bidding function can still be written in the same form--except that the spite factor is replaced by an `expressed' spite factor. This leads to bidders expressing spites that are higher or lower than their true spite depending on others' spite. Perhaps surprisingly, in the two-bidder case, the mapping from true spite to expressed...

Ankit Sharma, Tuomas Sandholm

Real-time Traffic