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arXiv · 2404.00475

Shill-Proof Auctions

Andrew Komo·Scott Duke Kominers·Tim Roughgarden
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Abstract

We characterize single-item auction formats that are shill-proof in the sense that a profit-maximizing seller has no incentive to submit shill bids. We distinguish between strong shill-proofness, in which a seller with full knowledge of bidders' valuations can never profit from shilling, and weak shill-proofness, which requires only that the expected equilibrium profit from shilling is non-positive. The Dutch auction (with a suitable reserve) is the unique (revenue-)optimal and strongly shill-proof auction. Any deterministic auction can satisfy only two properties in the set {static, strategy-proof, weakly shill-proof}. Our main results extend to settings with affiliated and interdependent values.

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Andrew Komo, Scott Duke Kominers, Tim Roughgarden. 2024-03-30. Shill-Proof Auctions. https://arxiv.org/abs/2404.00475

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