The second-price bidding system under uncertainty

Harunori Shishido, Dao Zhi Zeng, Xiaoguang Yang

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The Japanese government uses bidding auction systems to assign public construction projects to firms. Although the first-price auction is applied in most cases, it is known that firms do not bid their reservation prices, which makes the game-theoretic analysis difficult. The second-price auction has many nice properties and is expected to be applied more. We first compare the optimal strategies of the government in both systems under certainty, and find that the expected payoffs to the government are the same. Then we generalize the second-price auction to the situation with uncertain factors. Our result shows that the bidders bid in the same way as the situation without uncertainty.

Original languageEnglish
Title of host publication2004 IEEE International Conference on Systems, Man and Cybernetics, SMC 2004
Pages1056-1061
Number of pages6
DOIs
Publication statusPublished - 2004 Dec 1
Externally publishedYes
Event2004 IEEE International Conference on Systems, Man and Cybernetics, SMC 2004 - The Hague, Netherlands
Duration: 2004 Oct 102004 Oct 13

Publication series

NameConference Proceedings - IEEE International Conference on Systems, Man and Cybernetics
Volume1
ISSN (Print)1062-922X

Other

Other2004 IEEE International Conference on Systems, Man and Cybernetics, SMC 2004
CountryNetherlands
CityThe Hague
Period04/10/1004/10/13

Keywords

  • Optimal bidding price
  • Second-price auction
  • Uncertainty

ASJC Scopus subject areas

  • Engineering(all)

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    Shishido, H., Zeng, D. Z., & Yang, X. (2004). The second-price bidding system under uncertainty. In 2004 IEEE International Conference on Systems, Man and Cybernetics, SMC 2004 (pp. 1056-1061). (Conference Proceedings - IEEE International Conference on Systems, Man and Cybernetics; Vol. 1). https://doi.org/10.1109/ICSMC.2004.1398444