Scarce resources, Bargaining (negotiation)

Question 1

goal of a auction auction:

Answer 1

allocate good to one of the bidders

Question 2

English auction auction:

Answer 2

first price, open cry ascending; small bid increase is dominant; !shills and winners curse (overvaluing goods)

Question 3

Dutch auction auction:

Answer 3

open cry descending, !winners curse

Question 4

First-Price Sealed-bid auction:

Answer 4

single round one shot, highest offer wins: dominant is bidding a bit les then true value (Winner could have won any bidding just a bit more than the second highest bid)

Question 5

Vickrey auction:

Answer 5

second price sealed-bid, allows for anti-social behaviour; dominant is bidding to true value because you will not pay more than you want bc of second bid you will be cheaper out but win less often

Question 6

Which auction is maximum expected revenue for Risk neutral bidders ?

Answer 6

same revenue for all auctions

Question 7

Which auction is maximum expected revenue for Risk-averse bidders ?

Answer 7

Dutch and first-price sealed big auctions

Question 8

Which auction is maximum expected revenue for Risk-averse auctioneers?

Answer 8

English or Vickrey

Question 9

What is the Monotonic Concession protocol and how does it relate to bargaining/negotiation?

Answer 9

Both agents make several small concessions until an agreement is reached,

Question 10

What is the Zeuthen strategy?

Answer 10

The agent with the smallest risk conceds, and then just enough. Needed for this is a definition of risk. Is a strategy for Monotonic Concession protocol.

Question 11

Constant sum game vs zero sum games

Answer 11

sum of all players’s outcomes is constant vs 0

Question 12

dominant strategy

Answer 12

A strategy is dominant for an agent if it is the best whatever the other agents do => two Pareto improvement arrows in the same direction, pointing to dominant strategy

Question 13

Dominant strategy equilibrium

Answer 13

each agent uses a dominant strategy

Question 14

social welfare

Answer 14

measuring the sum of all individual outcomes (so inequality does not matter). Optimal social welfare may nog be achievable when individuals are self interested. Individual agents follow their own (different) utility function.

Question 15

Pareto efficient/optimal

Answer 15

if a better outcome for one agent always results in a worse outcome for some other agent (or both). (also if both agents like (2,2))

Question 16

Pareto improvement

Answer 16

change that is improvement for someone without without hurting anyone

Question 17

Nash equilibrium

Answer 17

two strategies s1 and s2 are in Nash equilibrium if: under the assumption that agent i plays s1, agent j can do no better than play s2; and and under the assumption that agent j plays s2, agent i can do no better than play s1. No individual has the incentive to unilaterally change strategy (ex: drive right side on the road). Nash equilibria do not always exist and are not always unique

Question 18

What is the succes of TIT-FOR-TAT?

Answer 18

don’t hold grudges, start by cooperating

Question 19

Deception in task oriented oriented domains can happen by:

Answer 19

phantom/decoy tasks or hidden tasks