Using priced options to solve the exposure problem in sequential auctions

Research output: Chapter in Book/Conference proceedings/Edited volumeConference contributionScientificpeer-review

2 Citations (Scopus)

Abstract

This paper studies the benefits of using priced options for solving the exposure problem that bidders with valuation synergies face when participating in multiple, sequential auctions. We consider a model in which complementary-valued items are auctioned sequentially by different sellers, who have the choice of either selling their good directly or through a priced option, after fixing its exercise price. We analyze this model from a decision-theoretic perspective and we show, for a setting where the competition is formed by local bidders, that using options can increase the expected profit for both buyers and sellers. Furthermore, we derive the equations that provide minimum and maximum bounds between which a synergy buyer's bids should fall in order for both sides to have an incentive to use the options mechanism. Next, we perform an experimental analysis of a market in which multiple synergy bidders are active simultaneously.

Original languageEnglish
Title of host publicationAgent-Mediated Electronic Commerce and Trading Agent Design and Analysis - AAMAS Workshop, AMEC 2008, and AAAI Workshop, TADA 2008, Revised Selected Papers
PublisherSpringer
Pages29-45
Number of pages17
ISBN (Print)3642152368, 9783642152368
DOIs
Publication statusPublished - 2010
Externally publishedYes
Event10th Workshop on Agent-Mediated Electronic Commerce, AMEC-X, Co-located with AAMAS 2008 and the 6th Workshop on Trading Agent Design and Analysis, TADA, Co-located with AAAI 2008 - Chicago, IL, United States
Duration: 14 Jul 200814 Jul 2008

Publication series

NameLecture Notes in Business Information Processing
Volume44 LNBIP
ISSN (Print)1865-1348

Conference

Conference10th Workshop on Agent-Mediated Electronic Commerce, AMEC-X, Co-located with AAMAS 2008 and the 6th Workshop on Trading Agent Design and Analysis, TADA, Co-located with AAAI 2008
CountryUnited States
CityChicago, IL
Period14/07/0814/07/08

Fingerprint Dive into the research topics of 'Using priced options to solve the exposure problem in sequential auctions'. Together they form a unique fingerprint.

Cite this