Auction Theory
Auction Theory
1 Auction Theory Basics
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Summary: Auctions are allocation mechanisms1.
Notations
Naively, an auction is observed to have several factors. To save keystrokes, we use a set of symbols to denote the variables:
the seller $\mathscr S$, the bidders $\{\mathscr B_i\}$, the object $\mathscr O$ to bid on, the bidding prices $\{b_i\}$. In an auction, each bidder $\mathscr B_i$ decides on a valuation $v_i$ of the object $\mathscr O$ and bid with a bidding price $b_i$ based on the valuation.
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