Fraction Auctions: The Tradeoff between Efficiency and Running Time

Abstract

This paper studies the sales of a single indivisible object where bidders have continuous valuations. In Grigorieva et al. [13] it was shown that, in this setting, query auctions necessarily allocate ineffciently in equilibrium. In this paper we propose a new sequential auction, called the c-fraction auction. We show c-fraction auctions guarantee approximate efficiency at any desired level of accuracy, independent of the number of bidders. We discuss the running time and the efficiency in the ex-post equilibrium of the auction. We show that by changing the parameter c of the auction we can trade off efficiency against running time.