Maximizing Revenue in Sequential Auctions
We study sequential auctions for private value objects and unit-demand bidders using second-price sealed-bid rules. We analyze this scenario from the seller’s perspective and consider several approaches to increasing the total revenue. We derive the equilibrium bidding strategies for each individual auction. We then study the problem of selecting an optimal agenda, i.e., a revenue-maximizing ordering of the auctions. We describe an efficient algorithm that finds an optimal agenda in the important special case when the revenue of each auction is guaranteed to be strictly positive. We also show that the seller can increase his revenue by canceling one or more auctions, even if the number of bidders exceeds the number of objects for sale, and analyze the bidders’ behavior and the seller’s profit for different cancellation rules.
KeywordsOptimal Agenda Total Revenue Bidding Strategy Combinatorial Auction Sequential Auction
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