Emerging Methods of Auction Design in Social Networks
This is an incremental survey summarizing existing methods for designing auctions in social networks, relevant for researchers in algorithmic game theory and market design.
The paper surveys diffusion auctions, which extend traditional auctions to social networks by incentivizing buyers to invite neighbors, leading to increased participation and improved outcomes like social welfare and revenue.
In recent years, a new branch of auction models called diffusion auction has extended the traditional auction into social network scenarios. The diffusion auction models the auction as a networked market whose nodes are potential customers and whose edges are the relations between these customers. The diffusion auction mechanism can incentivize buyers to not only submit a truthful bid, but also further invite their surrounding neighbors to participate into the auction. It can convene more participants than traditional auction mechanisms, which leads to better optimizations of different key aspects, such as social welfare, seller's revenue, amount of redistributed money and so on. The diffusion auctions have recently attracted a discrete interest in the algorithmic game theory and market design communities. This survey summarizes the current progress of diffusion auctions.