Daniel Rehsmann (University of Vienna) will present “Choose Your Auction: Mechanism Design for a Bidder” (with Dmitriy Knyazev)” on November 11th, 2024, at 10:30 AM, in room QA406.
Abstract:
This study discusses the maximization of a bidder’s utility in auctions by leveraging the information about a bidder’s value to formulate the auction’s rules. To make the analysis interesting, the research focuses on auction formats perceived as fair and unbiased, in line with common EU or WTO procurement regulations. In our main setup, we do not allow the auction to pay the bidders and characterize a preferable auction format as a second-price auction with pooling regions. The analysis then extends to include transfers towards bidders and demonstrates how a substantial interim utility can be guaranteed to a bidder without running a deficit in equilibrium. The theory is applied to a model of favoritism, discussing whether forms of preferential treatment in auctions are preventable or detectable.