Private From Whom? A Privacy Frontier for Auctions

Abstract

In many auctions, bidders may value keeping their information private from the auctioneer and other bidders. Among deterministic bilateral communication protocols, revealing less information to bidders requires revealing more information to the auctioneer, and vice versa. A protocol implementing a choice rule is on the Privacy Frontier if no alternative protocol reveals less to both bidders and the auctioneer. The sealed-bid first-price auction, the descending auction and the ascending auction are on the Privacy Frontier, but the sealed-bid second-price auction is not. We provide sufficient conditions for protocols to be on the Privacy Frontier and devise alternative frontier protocols.

arXiv comment47 pages