Simulation of the behavior of bidders in first-price sealed-bid auctions on communication networks

Abstract

Auction mechanisms have arisen as very efficient methods for scarce resource allocations. For this reason there is a current research topic based on the application of these economics mechanisms to the design of communication networks, mainly in the provision of QoS to new multimedia services. The main research works are oriented to the assignment and pricing rules, that is, the network resource assigned to the user (the bandwidth on a link, or the route of a traffic demand) and the amount of money it is going to cost to him respectively. However, as far as we know, there is a little research focused in the analysis of the behaviour of the user. Note that an auction is in fact a competition where the user will behave selfishly in order to obtain the greater profit. In this paper we present the first results of a simulator which analyzes the behaviour of the user in an auction over a communication link. They obtain the revenue of the auctioneer that is the network provider, and the resource allocation under different schemes of user behaviour, from a very conservative character up to most risky behaviours.