Incentives in Multi-dimensional Auctions under Information Asymmetry for Costs and Qualities

Athanasios Papakonstantinou, Peter Bogetoft

Publikation: Bidrag til bog/antologi/rapportBidrag til bog/antologiForskningpeer review

Resumé

This paper discusses the design of a novel multi-dimensional mechanism which allows a principal to procure a single project or an item from multiple suppliers through a two-step payment. The suppliers are capable of producing different qualities at costs which cannot exceed a certain value and the mechanism balances between the costs faced by the suppliers and the benefit the principal achieves from higher qualities. Iniatially, the principal implements a standard second score auction and allocates the project to a single supplier based its reported cost and quality, while then it elicits truthful reporting of the quality by issuing a symmetric secondary payment after observing the winner’s production. We then provide an alternate mechanism in which the principal issues an asymmetric secondary payment which rewards agents for producing higher qualities, while it penalises them for producing lower qualities than they reported. We prove that for both mechanisms truthful revelation of costs and qualities is a dominant strategy (weakly for costs) and that they are immune to combined misreporting of both qualities and costs. We also show that the mechanisms are individually rational, and that the optimal payments received by the winners of the auctions are equal to the payment issued by the standard second score auction.
OriginalsprogEngelsk
TitelAgent-Mediated Electronic Commerce : Designing Trading Strategies and Mechanisms for Electronic Markets
RedaktørerEster David, Christopher Kiekintveld , Onn Shebory, Sebastian Stein
Udgivelses stedHeidelberg
ForlagSpringer Science+Business Media
Publikationsdato2013
Sider104-118
ISBN (Trykt)9783642408632
ISBN (Elektronisk)9783642408649
DOI
StatusUdgivet - 2013
BegivenhedJoint Workshop on Trading Agent Design and Analysis (TADA) and Agent-Mediated Electronic Commerce (AMEC): At AAMAS 2012 - Valencia, Spanien
Varighed: 4 jun. 20124 jun. 2012
http://www.cs.utep.edu/kiekintveld/Workshops/TADAAMEC12.html

Workshop

WorkshopJoint Workshop on Trading Agent Design and Analysis (TADA) and Agent-Mediated Electronic Commerce (AMEC)
LandSpanien
ByValencia
Periode04/06/201204/06/2012
Internetadresse
NavnLecture Notes in Business Information Processing
Vol/bind136
ISSN1865-1348

Citer dette

Papakonstantinou, A., & Bogetoft, P. (2013). Incentives in Multi-dimensional Auctions under Information Asymmetry for Costs and Qualities. I E. David, C. Kiekintveld , O. Shebory, & S. Stein (red.), Agent-Mediated Electronic Commerce: Designing Trading Strategies and Mechanisms for Electronic Markets (s. 104-118). Heidelberg: Springer Science+Business Media. Lecture Notes in Business Information Processing, Bind. 136 https://doi.org/10.1007/978-3-642-40864-9_8
Papakonstantinou, Athanasios ; Bogetoft, Peter. / Incentives in Multi-dimensional Auctions under Information Asymmetry for Costs and Qualities. Agent-Mediated Electronic Commerce: Designing Trading Strategies and Mechanisms for Electronic Markets . red. / Ester David ; Christopher Kiekintveld ; Onn Shebory ; Sebastian Stein. Heidelberg : Springer Science+Business Media, 2013. s. 104-118 (Lecture Notes in Business Information Processing, Bind 136).
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Papakonstantinou, A & Bogetoft, P 2013, Incentives in Multi-dimensional Auctions under Information Asymmetry for Costs and Qualities. i E David, C Kiekintveld , O Shebory & S Stein (red), Agent-Mediated Electronic Commerce: Designing Trading Strategies and Mechanisms for Electronic Markets . Springer Science+Business Media, Heidelberg, Lecture Notes in Business Information Processing, bind 136, s. 104-118, Joint Workshop on Trading Agent Design and Analysis (TADA) and Agent-Mediated Electronic Commerce (AMEC), Valencia, Spanien, 04/06/2012. https://doi.org/10.1007/978-3-642-40864-9_8

Incentives in Multi-dimensional Auctions under Information Asymmetry for Costs and Qualities. / Papakonstantinou, Athanasios; Bogetoft, Peter.

Agent-Mediated Electronic Commerce: Designing Trading Strategies and Mechanisms for Electronic Markets . red. / Ester David; Christopher Kiekintveld ; Onn Shebory; Sebastian Stein. Heidelberg : Springer Science+Business Media, 2013. s. 104-118 (Lecture Notes in Business Information Processing, Bind 136).

Publikation: Bidrag til bog/antologi/rapportBidrag til bog/antologiForskningpeer review

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AB - This paper discusses the design of a novel multi-dimensional mechanism which allows a principal to procure a single project or an item from multiple suppliers through a two-step payment. The suppliers are capable of producing different qualities at costs which cannot exceed a certain value and the mechanism balances between the costs faced by the suppliers and the benefit the principal achieves from higher qualities. Iniatially, the principal implements a standard second score auction and allocates the project to a single supplier based its reported cost and quality, while then it elicits truthful reporting of the quality by issuing a symmetric secondary payment after observing the winner’s production. We then provide an alternate mechanism in which the principal issues an asymmetric secondary payment which rewards agents for producing higher qualities, while it penalises them for producing lower qualities than they reported. We prove that for both mechanisms truthful revelation of costs and qualities is a dominant strategy (weakly for costs) and that they are immune to combined misreporting of both qualities and costs. We also show that the mechanisms are individually rational, and that the optimal payments received by the winners of the auctions are equal to the payment issued by the standard second score auction.

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Papakonstantinou A, Bogetoft P. Incentives in Multi-dimensional Auctions under Information Asymmetry for Costs and Qualities. I David E, Kiekintveld C, Shebory O, Stein S, red., Agent-Mediated Electronic Commerce: Designing Trading Strategies and Mechanisms for Electronic Markets . Heidelberg: Springer Science+Business Media. 2013. s. 104-118. (Lecture Notes in Business Information Processing, Bind 136). https://doi.org/10.1007/978-3-642-40864-9_8