The Role of Transparency in Repeated First-Price Auctions with Unknown Valuations

Alapfogalmak

Transparency in first-price auctions impacts regret minimization strategies.

Kivonat

The article explores regret minimization for a single bidder in first-price auctions with unknown valuations. It delves into the impact of transparency on learning optimal bidding strategies. The study covers various feedback models and environments, providing insights into the interplay between transparency and learnability. Key highlights include:

Introduction to regret minimization in auction settings.
Analysis of different feedback models: full, transparent, semi-transparent, and bandit.
Examination of stochastic i.i.d. and adversarial environments.
Detailed results on minimax regret rates under different conditions.
Technical challenges faced in utility function approximation and feedback modeling.

Statisztikák

Our main contribution is a complete characterization, up to logarithmic factors, of the minimax regret in terms of the auction’s transparency.

Idézetek

"There is a clear tension regarding transparency: bidders want information on competing bids while revealing as little as possible about their own bids."
"Our algorithmic results provide bidders with learning strategies to exploit various degrees of transparency."

Főbb Kivonatok

The Role of Transparency in Repeated First-Price Auctions with Unknown Valuations

by Nico... : arxiv.org 03-22-2024

https://arxiv.org/pdf/2307.09478.pdf

Mélyebb kérdések

How does the level of transparency impact bidder behavior beyond regret minimization

In the context of auction settings, the level of transparency can have a significant impact on bidder behavior beyond just regret minimization. Increased transparency can lead to more informed bidding strategies as bidders have access to additional information about competing bids and valuations. This can result in more efficient price discovery, reduced uncertainty for bidders, and potentially higher overall market efficiency. Bidders may adjust their strategies based on the revealed information, leading to more competitive bidding and potentially fairer outcomes in auctions.

What are potential drawbacks or limitations of increased transparency in auction settings

While increased transparency in auction settings can offer benefits such as improved price discovery and market efficiency, there are also potential drawbacks or limitations to consider. One limitation is that excessive transparency could lead to strategic gaming by bidders who exploit the disclosed information to manipulate prices or collude with competitors. Additionally, full disclosure of bid data could compromise bidder privacy and confidentiality, especially in sensitive industries where competitive information must be kept confidential. Moreover, too much transparency may reduce trust among participants if they feel exposed or vulnerable due to extensive data sharing.

How can insights from this study be applied to other domains beyond auctions

Insights from this study on the impact of transparency in auction settings can be applied across various domains beyond auctions. For example:

Financial Markets: Understanding how different levels of transparency affect trading behaviors and market dynamics.
E-commerce Platforms: Analyzing how disclosing pricing information influences consumer decision-making processes.
Supply Chain Management: Examining the effects of transparent pricing mechanisms on supplier relationships and procurement strategies.
Healthcare Industry: Investigating how transparent pricing models impact patient choices and healthcare provider competition.
By applying these insights to other domains, organizations can make informed decisions about implementing transparent practices that balance efficiency with fairness and integrity.