AAMAS Conference 2026 Conference Paper
Time-Varyingness in Auction Breaks Revenue Equivalence
- Yuma Fujimoto
- Kaito Ariu
- Kenshi Abe
The revenue equivalence theorem states that equilibrium revenue is the same across different auction mechanisms, such as first- and second-price ones. However, the environment in the real-world auctions varies over time and can prevent bidders from reaching such an equilibrium. While second-price auctions allow bidders to automatically maintain equilibrium through truthful bidding, firstprice auctions require bidders to track moving equilibria through continuous learning. We demonstrate that this tracking lag breaks revenue equivalence. Which of the first- and second-price auctions yields higher revenue depends on the correlation between the basis value (the standard price to bid) and the value interval (the width of possible values). This study uncovers a novel phenomenon that can be triggered by time-varying environments in real-world auctions.