Auctions Revolutionized: Maximizing Revenue and Welfare for All Bidders
The article explores how different auction setups affect both social welfare and revenue. By breaking down the analysis into two parts, the researchers show that in any auction, a bidder's impact on welfare is related to the price they pay for additional items. They also find that the prices bidders face are linked to the revenue of the auction. The study reveals that in certain auctions, the revenue generated is a good approximation of what could be achieved in an optimal auction. For example, in a specific type of auction with reserve prices, the revenue is at least 3.16 times the optimal revenue. The researchers also provide insights into other types of auctions and how running multiple auctions simultaneously can impact outcomes.