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Summary: Competitive Auctions
Andrew V. Goldberg
goldberg@microsoft.com
Jason D. Hartline
hartline@cs.washington.edu
Anna R. Karlin
karlin@cs.washington.edu
Michael Saks§
saks@math.rutgers.edu
Andrew Wright¶
akwright@acm.org
Abstract
We study a class of single-round, sealed-bid auctions for items in unlimited supply, such
as digital goods. We introduce the notion of competitive auctions. A competitive auction is
truthful (i.e., encourages buyers to bid their utility) and yields profit that is roughly within a
constant factor of the profit of optimal fixed pricing for all inputs. We justify the use of optimal
fixed pricing as a benchmark for evaluating competitive auction profit. We show that several
randomized auctions are truthful and competitive and that no truthful deterministic auction is
competitive. Our results extend to bounded supply markets, for which we also get truthful and
competitive auctions.
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