Category: Auction theory

Revenue equivalence
Revenue equivalence is a concept in auction theory that states that given certain conditions, any mechanism that results in the same outcomes (i.e. allocates items to the same bidders) also has the sa
Linkage principle
The linkage principle is a finding of auction theory. It states that auction houses have an incentive to pre-commit to revealing all available information about each lot, positive or negative. The lin
Digital goods auction
In auction theory, a digital goods auction is an auction in which a seller has an unlimited supply of a certain item. A typical example is when a company sells a digital good, such as a movie. The com
Regular distribution (economics)
Regularity, sometimes called Myerson's regularity, is a property of probability distributions used in auction theory and revenue management. Examples of distributions that satisfy this condition inclu
Win rate
In advertising, a win rate is a percentage metric in programmatic media marketing that measures the number of impressions won over the number of impressions bid. Win rates are used to gauge competitio
Name your own price
Name your own price (NYOP) is a pricing strategy under which buyers make a suggestion for a product’s price (unlike the traditional way where sellers quote a certain price) and the transaction occurs
Competitive equilibrium
Competitive equilibrium (also called: Walrasian equilibrium) is a concept of economic equilibrium introduced by Kenneth Arrow and Gérard Debreu in 1951 appropriate for the analysis of commodity market
Spectrum auction
A spectrum auction is a process whereby a government uses an auction system to sell the rights to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum res
Budget-feasible mechanism
In mechanism design, a branch of economics, a budget-feasible mechanism is a mechanism in which the total payment made by the auctioneer is upper-bounded by a fixed pre-specified budget. They were fir
Market design
Market design is a practical methodology for creation of markets of certain properties, which is partially based on mechanism design. In some markets, prices may be used to induce the desired outcomes
Auction theory
Auction theory is an applied branch of economics which deals with how bidders act in auction markets and researches how the features of auction markets incentivise predictable outcomes. Auction theory
Price of anarchy in auctions
The Price of Anarchy (PoA) is a concept in game theory and mechanism design that measures how the social welfare of a system degrades due to selfish behavior of its agents. It has been studied extensi
Winner's curse
The winner's curse is a phenomenon that may occur in common value auctions, where all bidders have the same (ex post) value for an item but receive different private (ex ante) signals about this value
Budget-balanced mechanism
In mechanism design, a branch of economics, a weakly-budget-balanced (WBB) mechanism is a mechanism in which the total payment made by the participants is 0. This means that the mechanism operator doe
Auction algorithm
The term "auction algorithm" applies to several variations of a combinatorial optimization algorithm which solves assignment problems, and network optimization problems with linear and convex/nonlinea
Bid-to-cover ratio
Bid-To-Cover Ratio is a ratio used to measure the demand for a particular security during offerings and auctions. In general, it is used for shares, bonds, and other securities. It may be computed in