Decision Sciences
4 years ago

Personalized reserve prices in auctions maximize revenue and outsmart bidders.

1 view
Operations Research
Incentive-Compatible Learning of Reserve Prices for Repeated Auctions
Yash Kanoria, Hamid Nazerzadeh

Paper Summary

Auctioneers can make more money by setting reserve prices based on past bids. If they update a common reserve price, bidders will lower their bids, reducing revenue. But if each bidder has a personalized reserve price, revenue can be maximized. This means setting reserve prices based on what other bidders have bid in the past.

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