Bidding

About: Bidding is a research topic. Over the lifetime, 15371 publications have been published within this topic receiving 294233 citations. The topic is also known as: competitive bidding.

Sequential auctions for the allocation of resources with complementarities

Abstract: Market-based mechanisms such as auctions are being studied as an appropriate means for resource allocation in distributed and inultiagenl decision problems. When agents value resources in combination rather than in isolation, one generally relies on combinatorial auctions where agents bid tor resource bundles. or simultaneous auctions for all resources. We develop a different model, where agents bid for required reources sequentially. This model has the advantage that it can be applied in settings where combinatorial and simultaneous models are infeasible (e.g.. when resources are made available at different points in time by different parties), as well as certain benefits in settings where combinatorial models are applicable. We develop a dynamic programming model tor agents to compute bidding policies based on estimated distributions over prices. We also describe how these distributions are updated to provide a learning model for bidding behavior.

Energy and ancillary service dispatch for the interim ISO New England electricity market

Abstract: Since the Federal Energy Regulatory Commission's (FERC) order no. 888 has mandated the establishment of unbundled electricity markets in the newly deregulated environment, competitive bidding of ancillary services, along with bidding of energy, becomes increasingly important. In this paper, an optimization-based framework for solving a multi-commodity electricity market dispatch problem is presented. In compliance with New England Power Pool (NEPOOL) Market Rules and Procedures, a hybrid dispatch method which combines the sequential dispatch method with the joint dispatch method is proposed to solve the energy and ancillary dispatch problem for ISO New England (ISO-NE). Numerical results on a 6-unit test system and the 324-unit ISO-NE system are included.

A Study of the Internal Organization of a Bidding Cartel

Abstract: This paper examines bidding in over 1,700 knockout auctions used by a bidding cartel (or ring) of stamp dealers in the 1990s. The knockout was conducted using a variant of the model studied by Daniel Graham, Robert Marshall, and Jean-Francois Richard (1990). Following a reduced form examination of these data, damages, induced inefficiency, and the ring's benefit from colluding are estimated using a structural model in the spirit of Emmanuel Guerre, Isabelle Perrigne, and Quang Vuong (2000). A notable finding is that nonring bidders suffered damages that were of the same order of magnitude as those of the sellers.

A unified framework for dynamic pari-mutuel information market design

Abstract: Recently, coinciding with and perhaps driving the increased popularity of prediction markets, several novel pari-mutuel mechanisms have been developed such as the logarithmic market scoring rule (LMSR), the cost-function formulation of market makers, and the sequential convex parimutuel mechanism (SCPM). In this work, we present a unified convex optimization framework which connects these seemingly unrelated models for centrally organizing contingent claims markets. The existing mechanisms can be expressed in our unified framework using classic utility functions. We also show that this framework is equivalent to a convex risk minimization model for the market maker. This facilitates a better understanding of the risk attitudes adopted by various mechanisms. The utility framework also leads to easy implementation since we can now find the useful cost function of a market maker in polynomial time through the solution of a simple convex optimization problem.In addition to unifying and explaining the existing mechanisms, we use the generalized framework to derive necessary and sufficient conditions for many desirable properties of a prediction market mechanism such as proper scoring, truthful bidding (in a myopic sense), efficient computation, controllable risk-measure, and guarantees on the worst-case loss. As a result, we develop the first proper, truthful, risk controlled, loss-bounded (in number of states) mechanism; none of the previously proposed mechanisms possessed all these properties simultaneously. Thus, our work could provide an effective tool for designing new market mechanisms.

Budget optimization in search-based advertising auctions

Abstract: Internet search companies sell advertisement slots based on users' search queries via an auction. While there has been previous work onthe auction process and its game-theoretic aspects, most of it focuses on the Internet company. In this work, we focus on the advertisers, who must solve a complex optimization problem to decide how to place bids on keywords to maximize their return (the number of user clicks on their ads) for a given budget. We model the entire process and study this budget optimization problem. While most variants are NP-hard, we show, perhaps surprisingly, that simply randomizing between two uniform strategies that bid equally on all the keywordsworks well. More precisely, this strategy gets at least a 1-1/e fraction of the maximum clicks possible. As our preliminary experiments show, such uniform strategies are likely to be practical. We also present inapproximability results, and optimal algorithms for variants of the budget optimization problem.