| This research funded in part by HP Research Gift (2004), and GW Dilthey Award (2004), and joint with graduated doctoral student Yu-An Sun (now at Xerox Research) and Economics faculty member Sumit Joshi. |
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In this research, we examine various instances of the problem where a seller changes the rules of the auctions after bidders submit their bids (eBay's second-chance offer is an example). We view this as a privacy problem because a bidder's information (the bid) is used against him, to the seller's benefit, when the rules are changed. We observe that, in certain types of situations, the bidder can provide a disincentive to the seller by introducing uncertainty in the bid. In [1], we find that the bidder will quantize his bid with the quantization intervals depending on the probability of the seller changing the rules. We have derived detailed seller and bidder strategies for versions of the second-chance offer; in several caes the strategies are randomized [2-4]. For simple versions of the game, we have examined differences in bidder payoff between the use of strategic bidding vs. cryptographic protection, and find that strategic bidding provides better protection [5]. |
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