Optimality and efficiency in auctions design: A survey

Abstract

Efficiency and optimality are the two primary and generally conflicting goals in any auction design: the former focuses on the social welfare of the whole seller–bidder system, whereas the latter emphasizes revenue-maximizing on the seller side. In this chapter, we review the auctions design problem based on these two aspects in various information structures and circumstances. The most recent results are collected and analyzed. This chapter tends to complement the survey, Auction Theory: A Guide to the Literature, by Klemperer [58] in 1999. The main objective of this chapter is to provide a thorough survey on the current auctions design literature and to synthesize the developed theories underlying traditional auctions with the new elements and phenomena from the emerging and rapidly growing areas, such as online auctions.