Manipulating Information Providers Access to Information in Auctions - Technologies and Applications of Artificial Intelligence - page 14

Manipulating Information Providers Access
to Information in Auctions
Shani Alkoby 1 , David Sarne 1 ,andEstherDavid 2
1 Department of Computer Science
Bar-Ilan University, Ramat-Gan, Israel
2 Department of Computer Science
Ashkelon Academic College, Ashkelon, Israel
[e-mail]
[e-mail]
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Abstract. Information purchasing is a crucial issue that auctioneers
have to consider when running auctions, in particular in auction set-
tings where the auctioned item's value is affected by a common value
element. In such settings it is reasonable to assume the existence of a
self-interested information provider. The main contribution of the infor-
mation provider may be the elimination of some uncertainty associated
with the common value of the auctioned item. The existence of an in-
formation provider does not necessarily impose the use of its services.
Moreover, in cases in which the auctioneer decides to purchase informa-
tion, it is not always beneficial for him to disclose it. In this work, we
focus on environment settings where the information that may purchased
still involves some uncertainty. The equilibrium analysis is provided with
illustrations that highlight some non-intuitive behaviors. In particular,
we show that in some cases it is beneficial for the auctioneer to initially
limit the level of detail and precision of the information he may pur-
chase. This can be achieved, for example, by limiting the information
provider's access to some of the data required to determine the exact
common value. This result is non-intuitive especially in light of the fact
that the auctioneer is the one who decides whether or not to use the ser-
vices of the information provider; hence having the option to purchase
better information may seem advantageous.
Keywords: auction, common value, self interested auctioneer, informa-
tion provider.
1 Introduction
One of the main crucial issues that an auction mechanism designer should take
into account is information disclosure. Namely, what part of the information
should be revealed in order to maximize the auctioneer's target utility which
can either be related to the auctioned good's expected revenue in case of a self-
interested designer or social welfare in cases in which the auction designer acts as