A Dynamic Unit-Demand Auction with Bid Revision and Sniping Fees

We present a dynamic unit-demand auction that supports arbitrary bid revision. Each round of the dynamic auction takes a tentative allocation and pricing as part of the input, and allows each bidder — including a tentatively allocated bidder — to submit an arbitrary unit-demand bid. We establish strong properties of the dynamic auction related to truthfulness and efficiency. Using a certain privacy preservation property of each round of the auction, we show that the overall dynamic auction is highly resistant to shilling. We present a fast algorithm for implementing the proposed auction. Using this algorithm, the amortized cost of processing each bidding operation is upper bounded by the complexity of solving a singlesource shortest paths problem on a graph with nonnegative edge weights and a node for each item in the auction. We propose a dynamic price adjustment scheme that discourages sniping by providing incentives to bid early in the auction.