So D “wins” the bid, and B pays him $15 to go get the kids from their grandma’s.
Shouldn’t it be more something like 15+(100-15)/2$? So both win (about) the same amount of utility? Otherwise, the one who was ready to pay 100$ saved (“won”) 85$ and the other won nothing (s/he was indifferent to pay or do it for 15$).
Nice post by the way. Such techniques seem useful if you trust the other will make a bid that really represents the amount s/he’s ready to pay.
Thank you! See above (“Better to not have people feel like their desperation is being capitalized on.”) for my response to your first question. And we actually believe that our system is, in practice if not in theory, strategy-proof. It’s explicitly ok to game the system to our hearts’ delight. It seems to be quite robust to that. Our utilities tend to either be uncannily well-matched, in which case it’s kind of a coin flip who wins, or they’re wildly different, but we never seem to have enough certainty about how different they’ll be for it to be fruitful to distort our bids much.
The strategy of “just say a number such that you’re torn about whether you’d rather win or lose” seems to be close enough to optimal.
Shouldn’t it be more something like 15+(100-15)/2$? So both win (about) the same amount of utility? Otherwise, the one who was ready to pay 100$ saved (“won”) 85$ and the other won nothing (s/he was indifferent to pay or do it for 15$).
Nice post by the way. Such techniques seem useful if you trust the other will make a bid that really represents the amount s/he’s ready to pay.
Thank you! See above (“Better to not have people feel like their desperation is being capitalized on.”) for my response to your first question. And we actually believe that our system is, in practice if not in theory, strategy-proof. It’s explicitly ok to game the system to our hearts’ delight. It seems to be quite robust to that. Our utilities tend to either be uncannily well-matched, in which case it’s kind of a coin flip who wins, or they’re wildly different, but we never seem to have enough certainty about how different they’ll be for it to be fruitful to distort our bids much.
The strategy of “just say a number such that you’re torn about whether you’d rather win or lose” seems to be close enough to optimal.