Back-to-Basics Weekend Reading - Auctions and bidding: A guide for computer scientists

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I have just returned from the AWS Summits in New Zealand and Japan, which were both very well attended and, according to the feedback, very successful. While I was in New Zealand I had great discussion with the folks from Trade Me, the auction site which according to some counts for 70% of all NZ internet traffic. This resulted in some deep technical conversations later, over beer, with some colleagues and customers about the principles behinds different auction and bidding styles. I noticed that my basic knowledge there was rather rusty and I have decided to use this weekend to go a bit more in-depth in the various styles and techniques. An ideal paper for this is the survey by Parsons, Rodriquez-Aguilar and Klein, as it writing style brings economists and computer scientists together.

There is a veritable menagerie of auctions — single dimensional, multi-dimensional, single sided, double sided, first price, second price, English, Dutch, Japanese, sealed bid — and these have been extensively discussed and analysed in the economics literature. The main purpose of this paper is to survey this literature from a computer science perspective, primarily from the viewpoint of computer scientists who are interested in learning about auction theory, and to provide pointers into the economics literature for those who want a deeper technical understanding. In addition, since auctions are an increasingly important topic in computer science, we also look at work on auctions from the computer science literature. Overall, our aim is to identifying what both these bodies of work these tell us about creating electronic auctions.

Auctions and bidding: A guide for computer scientists, Simon Parsons, Juan A. Rodriguez-Aguilar and Mark Klein, ACM Computing Surveys (CSUR), Volume 43 Issue 2, January 2011