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Mediators in position auctions

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  • Ashlagi, Itai
  • Monderer, Dov
  • Tennenholtz, Moshe

Abstract

A mediator is a reliable entity which plays on behalf of the players who give her the right to play. The mediator acts in a pre-specified way based on messages received from the players. However, a mediator cannot enforce behavior; that is, players can play in the game directly without the mediator's help. A mediator generates a new game for the players, the mediated game. The outcome in the original game of an equilibrium in the mediated game is called a mediated equilibrium. Monderer and Tennenholtz introduced a theory of mediators for games with complete information. We extend the theory of mediators to games with incomplete information, and apply the new theory to position auctions, a central topic in electronic commerce. We provide a minimal set of conditions on position auctions, which is sufficient to guarantee that the VCG outcome function is a mediated equilibrium in these auctions.

Suggested Citation

  • Ashlagi, Itai & Monderer, Dov & Tennenholtz, Moshe, 2009. "Mediators in position auctions," Games and Economic Behavior, Elsevier, vol. 67(1), pages 2-21, September.
    • Handle: RePEc:eee:gamebe:v:67:y:2009:i:1:p:2-21
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    2. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.
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    4. Francesco Decarolis & Maris Goldmanis & Antonio Penta, 2020. "Marketing Agencies and Collusive Bidding in Online Ad Auctions," Management Science, INFORMS, vol. 66(10), pages 4433-4454, October.
    5. Arieli, Itai & Babichenko, Yakov & Tennenholtz, Moshe, 2017. "Sequential commitment games," Games and Economic Behavior, Elsevier, vol. 105(C), pages 297-315.
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    8. Itai Ashlagi & Dov Monderer & Moshe Tennenholtz, 2011. "Simultaneous Ad Auctions," Mathematics of Operations Research, INFORMS, vol. 36(1), pages 1-13, February.
    9. Emmanuel LORENZON, 2016. "Collusion with a Greedy Center in Position Auctions," Cahiers du GREThA (2007-2019) 2016-08, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).

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