Abstract
Auctions are procedures for selling one or more items to one or more bidders. Auctions induce games among the bidders, so notions of equilibrium from game theory can be applied to auctions. Auction theory aims to characterize and compare the equilibrium outcomes for different types of auctions. Combinatorial auctions arise when multiple-related items are sold simultaneously.
Introduction
Three commonly used types of auctions for the sale of a single item are the following:
First price auction: Each bidder submits a bid one of the bidders submitting the maximum bid wins, and the payment for the item is the maximum bid. (In this context “wins” means receives the item, no matter what the payment.)
Second price auction or Vickrey auction: Each bidder submits a bid, one of the bidders submitting the maximum bid wins, and the payment for the item is the second highest bid.
English auction:The price for the item increases continuously or in some small increments, and bidders drop...
References
Ausubel LM, Milgrom PR (2002) Ascending auctions with package bidding. BE J Theor Econ 1(1): Article 1
Cramton P (2006) Simultaneous ascending auctions. In: Cramton P, Shoham Y, Steinberg R (eds) Combinatorial auctions, chapter 4. MIT, Cambridge, pp 99–114
Cramton P (2013) Spectrum auction design. Rev Ind Organ 42(4):161–190
DeMarzo PM, Kremer I, Skrzypacz A (2005) Bidding with securities: auctions and security bidding with securities: auctions and security design. Am Econ Rev 95(4):936–959
Krishna V (2002) Auction theory. Academic, San Diego
Milgrom PR (2004) Putting auction theory to work. Cambridge University Press, Cambridge/ New York
Milgrom PR, Weber RJ (1982) A theory of auctions and competitive bidding. Econometrica 50(5):1089–1122
Myerson R (1981) Optimal auction design. Math Oper Res 6(1):58–73
Wilson R (1987) Game theoretic analysis of trading processes. In: Bewley T (ed) Advances in economic theory. Cambridge University Press, Cambridge/New York
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Section Editor information
Rights and permissions
Copyright information
© 2019 Springer-Verlag London Ltd., part of Springer Nature
About this entry
Cite this entry
Hajek, B. (2019). Auctions. In: Baillieul, J., Samad, T. (eds) Encyclopedia of Systems and Control. Springer, London. https://doi.org/10.1007/978-1-4471-5102-9_36-2
Download citation
DOI: https://doi.org/10.1007/978-1-4471-5102-9_36-2
Published:
Publisher Name: Springer, London
Print ISBN: 978-1-4471-5102-9
Online ISBN: 978-1-4471-5102-9
eBook Packages: Springer Reference EngineeringReference Module Computer Science and Engineering