Conceptos Básicos
This paper characterizes auction formats that are "shill-proof" in the sense that a profit-maximizing seller has no incentive to submit any shill bids.
Resumen
The key insights from this paper are:
Strongly Shill-Proof Auctions:
The Dutch auction (with a suitable reserve price) is the unique optimal and strongly shill-proof auction format.
Any other auction format besides the Dutch auction will allow the seller to profitably shill bid in some cases, even with full knowledge of bidders' valuations.
Weakly Shill-Proof and Efficient Auctions:
The Dutch auction (with no reserve) is the unique prior-independent auction that is both efficient and weakly shill-proof.
Any efficient and weakly shill-proof auction must conclude with a Dutch auction when all bidders' valuations fall below the monopoly price.
Weakly Shill-Proof and Strategy-Proof Optimal Auctions:
There is a multiplicity of strategy-proof, weakly shill-proof, and optimal auctions.
However, any optimal auction can satisfy at most two properties in the set {static, strategy-proof, weakly shill-proof}.
The paper provides a comprehensive theory of shill-proof auction design, highlighting the key role of the Dutch auction format in achieving shill-proofness.