Dynamic Pricing and Auction - Department of Industrial Engineering ...
Dynamic Pricing and Auction - Department of Industrial Engineering ...
Dynamic Pricing and Auction - Department of Industrial Engineering ...
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The concept <strong>of</strong> efficiency <strong>and</strong> pr<strong>of</strong>itmaximization i <strong>and</strong> three popular mechanisms• Efficiency◦ All the major action formats are efficientassuming the bidder is truthful• Optimality◦ First price auction <strong>and</strong> English auctionsare optimal.◦ What about the second price auction?◦ It becomes optimal if an appropriatereserve price is set.