An Efficient Ascending-Bid Auction for Multiple Objects: Comment

Ausubel (2004) introduces a new ascending-bid auction rule for multiple homogeneous objects, called the Ausubel auction, which is a dynamic counterpart of the Vickrey auction. He claims that in the Ausubel auction with private values, sincere bidding by all bidders is an ex post perfect equilibrium. However, we show that this claim does not hold in general by providing a counterexample. We then modify the Ausubel auction so that sincere bidding by all bidders is an ex post perfect equilibrium. (JEL D44)

An Introduction of Evolutionary Computation in Auctions

The increasing use of auctions as a selling mechanism has led to a growing interest in the subject. Thus both auction theory and experimental examinations of these theories are being developed. A recent method used for carrying out research on auctions has been the design of computational simulations. The aim of this chapter is to give a background about auction theory and to present how evolutionary computation techniques can be applied to auctions. Besides, a complete review to the related literature is also made. Finally, an explained example shows how a genetic algorithm can help automatically find bidders’ optimal strategies for a specific dynamic multi-unit auction—the Ausubel auction—with private values, drop-out information, and with several rationing rules implemented. The method provides the bidding strategy (defined as the action to be taken under different auction conditions) that maximizes the bidder’s payoff. The algorithm is tested under several experimental environments that differ in the elasticity of their demand curves, number of bidders, and quantity of lots auctioned. The results suggest that the approach leads to strategies that outperform sincere bidding when rationing is needed.