Amy Greenwald, Jiacui Li, Eric Sodomka
In many large economic markets, goods are sold through sequential auctions. Such domains include eBay, online ad auctions, wireless spectrum auctions, and the Dutch flower auctions. Bidders in these domains face highly complex decision-making problems, as their preferences for outcomes in one auction often depend on the outcomes of other auctions, and bidders have limited information about factors that drive outcomes, such as other bidders' preferences and past actions. In this work, we formulate the bidder's problem as one of price prediction (i.e., learning) and optimization. We define the concept of stable price predictions and show that (approximate) equilibrium in sequential auctions can be characterized as a profile of strategies that (approximately) optimize with respect to such (approximately) stable price predictions. We show how equilibria found with our formulation compare to known theoretical equilibria for simpler auction domains, and we find new approximate equilibria for a more complex auction domain where analytical solutions were heretofore unknown.