Issues in Computational Vickrey Auctions

Abstract

:The Vickrey auction has been widely advocated for multiagent systems. This protocol has several limitations (lower revenue than with alternative protocols, lying in non-private-value auctions, bidder collusion, lying auctioneers, undesirable revelations of sensitive information), and they are reviewed so as to guide practitioners in deciding when to use it. The special characteristics of Internet auctions are also discussed (third-party auction servers, cryptography, how proxy agents relate to the revelation principle and fail to promote truth telling), as well as several limitations of the protocol that stem from considerations of computational complexity (inefficient allocation and lying in sequential auctions of interrelated items, untruthful bidding under valuation uncertainty, counterspeculation to make deliberation-control or information-gathering decisions). Finally, methods for determining winners and prices in combinatorial"second-price” auctions are treated, together with the implications for truth dominance.