A Osepayshvili, MP Wellman, DM Reeves, and JK MacKie-Mason

Twenty-First Conference on Uncertainty in Artificial Intelligence, 2005.
Copyright (c) 2005, Osepayshvili et al.

Abstract

Simultaneous ascending auctions present agents with the exposure problem: bidding to acquire a bundle risks the possibility of obtaining an undesired subset of the goods. Auction theory provides little guidance for dealing with this problem. We present a new family of decision-theoretic bidding strategies that use probabilistic predictions of final prices. We focus on self-confirming price distribution predictions, which by definition turn out to be correct when all agents bid decision-theoretically based on them. Bidding based on these is provably not optimal in general, but our experimental evidence indicates the strategy can be quite effective compared to other known methods.

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