Overview Problem: maximize profit in complex FCC auction –high stakes ($billions) –communication forbidden Solution: communication-free coordination –coordinate demand reduction Results: nearly 50% more profit –over $1.4 billion extra Algorithm: self-enforcing, robust, stable, fair, simple –related real-world strategies

Maximize Profit Multi-billion-dollar auctions Complex rules and scenarios 50% more profit $1.4 billion extra Interesting theory as well

PRSDR is… Effective---50% more profit Robust---self-enforcing against defection Stable---despite auction scenario changes Reliable---despite very uncertain knowledge Safe---can abandon loss-free at any time Equitable---reasonable allocation of goods Fair---no unlucky losers Simple---easy to use

Applicable to Real Auctions Huge potential gains Safe to try Easy to use Hard to break Real bidders already seek and use related strategies –threats –strategic demand reduction –sniping (randomized) –problems with coordination

Experimental Setup Realistic FCC auction simulator –realistic, complex testbed –follows published auction rules –hundreds of goods –scores of categories –simultaneous, over 100 rounds Realistic agents –crafted with input from AT&T’s real FCC auction bidding team –goals based on published data

Algorithm Overview Bid on everything you want Tie-breaking creates allocation Respect allocation; no competition Fairing mechanism ensures reasonableness Defectors automatically punished Punishment removes all incentive to cheat Punishers still earn more

Per-Round Algorithm

Empirical Results Per-Agent Profit Enforcement Effects Wasted Profit

Analysis Challenges conventional auction design theory –hard to thwart without tradeoffs Studies suggest people open to these tactics –random allocation (sniping) –paying to punish cheaters –coordinating SDR Game Theory –Prisoner’s Dilemma –Cooperate, Hedge, Defect –pure Nash equilibrium

Effective, Robust, Realistic Communication-free coordination Much higher profits Benefits of cooperation Benefits of using even uncertain knowledge Real-world functionality relies on simple assumptions: 1.bidders want more profit 2.bidders familiar with PRSDR and its benefits 3.bidders willing to try it risk-free