Shill-Proof Auctions
Theoretical Economics
2026-01-01 v3 Computer Science and Game Theory
Abstract
We characterize single-item auction formats that are shill-proof in the sense that a profit-maximizing seller has no incentive to submit shill bids. We distinguish between strong shill-proofness, in which a seller with full knowledge of bidders' valuations can never profit from shilling, and weak shill-proofness, which requires only that the expected equilibrium profit from shilling is non-positive. The Dutch auction (with a suitable reserve) is the unique (revenue-)optimal and strongly shill-proof auction. Any deterministic auction can satisfy only two properties in the set {static, strategy-proof, weakly shill-proof}. Our main results extend to settings with affiliated and interdependent values.
Cite
@article{arxiv.2404.00475,
title = {Shill-Proof Auctions},
author = {Andrew Komo and Scott Duke Kominers and Tim Roughgarden},
journal= {arXiv preprint arXiv:2404.00475},
year = {2026}
}