Multi-bid versus progressive second price auctions in a stochastic environment

Abstract

Pricing is considered a relevant way to control congestion and differentiate services in communication networks. Among all pricing schemes, auctioning for bandwidth has received a lot of attention. We aim in this paper at comparing a recently designed auction scheme called multi-bid auction with the often referenced progressive second price auction. We especially focus on the case of a stochastic environment, with players/users entering and leaving the game. We illustrate the gain that can be obtained with multi-bids, in terms of complexity, revenue and social welfare in both transient and steady-state regime. © Springer-Verlag Berlin Heidelberg 2004.