On Revenue Optimal Combinatorial Auctions - IFP Group at the ...
On Revenue Optimal Combinatorial Auctions - IFP Group at the ...
On Revenue Optimal Combinatorial Auctions - IFP Group at the ...
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<strong>Revenue</strong> vs Efficiency - Example 2<br />
The buyer with <strong>the</strong> highest valu<strong>at</strong>ion need not win:<br />
Buyer 1 Buyer 2<br />
1/2 1/2 1/2 1/2<br />
$5 $10 $1 $2<br />
Efficient auction<br />
<strong>Revenue</strong> optimal auction<br />
Always sell to buyer 1.<br />
Sell to buyer 1 if v 1 = $10 <strong>at</strong> $10, else sell<br />
to buyer 2 <strong>at</strong> $1.<br />
Price charged can be <strong>at</strong> most $5. <strong>Revenue</strong> = (10 + 1)*0.5 = $5.5.<br />
MSW = (10 + 5)*0.55 = $7.5. RSW = (10 + 0.5*(2 05*(2+ 1))*0.5 = $5.75.