Auction analysis by normal form game approximation

Paper:

Auction analysis by normal form game approximation

Appears:

IEEE/WIC/ACM International Conference on Intelligent Agent Technology

Abstract:

Auctions are pervasive in todays' society and provide a variety of real markets. This article facilitates a strategic choice between a set of available trading strategies by introducing a methodology to approximate heuristic payoff tables by normal form games. An example from the auction domain is transformed by this means and an evolutionary game theory analysis is applied subsequently. The information loss in the normal form approximation is shown to be reasonably small such that the concise normal form representation can be leveraged in order to make strategic decisions in auctions. In particular, a mix of trading strategies that guarantees a certain profit is computed and further applications are indicated.

Keywords:

Clearing house, trading strategy, game theory, replicator dynamics.

Availability:

This paper is available as a PDF file.

Other information:

This paper is a copy of the camera-ready version that appeared in the conference proceedings.