Title: Overbidding Strategies in Combinatorial Auctions
Abstract:
Many practical combinatorial auctions have employed minimum-revenue core-selecting payment rules as a mechanism to determine the prices to be paid by the winners of the auction. Interestingly, the mechanics of these rules give rise to incentives to overbid, i.e. submitting a bid above one's true value. Such a bid can, if placed cleverly, reduce the own payment that has to be paid for winning items in the auction. Beck and Ott (2013) recently proved that such strategies can occur in equilibrium and that the amount of information available to the bidders plays an important role. For my Bsc thesis, I built upon the results from Beck and Ott and found new overbidding equilibria for different payment rules using computational methods presented by Lubin, Bünz and Seuken (2015). With overbidding it is also possible to explain some peculiar results of practical auctions.
