Shill-Proof Auctions
Year: 2024
Type: article
Abstract: In a single-item auction, a duplicitous seller may masquerade as one or more bidders in order to manipulate the clearing price. This paper characterizes auction formats that are shill-proof : a profit-maximizing seller has no incentive to submit any shill bids. We distinguish between strong shill-proofness, in which a seller with full knowledge of bidders’ valuations can never profit from shilling, and weak shill-proofness, which requires only that the expected equilibrium profit from shilling is nonpositive. The Dutch auction (with suitable reserve) is the unique optimal and strongly shill-proof auction. Moreover, the Dutch auction (with no reserve) is the unique prior-independent auction that is both efficient and weakly shill-proof. While there are a multiplicity of strategy-proof, weakly shill-proof, and optimal auctions; any optimal auction can satisfy only two properties in the set {static,strategy-proof, weakly shill-proof}.
Source: Stanford Digital Repository
DOI: 10.25740/gq699tk6706
Authors: Komo, Andrew, Duke Kominers, Scott, Roughgarden, Tim
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6908534741
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