Robust Analysis of Auction Equilibria

Equilibria in auctions can be very difficult to analyze, beyond the symmetric environments where revenue equivalence renders the analysis straightforward. This paper takes a robust approach to evaluating the equilibria of auctions. Rather than identify the equilibria of an auction under specific environmental conditions, it considers worst-case analysis, where an auction is evaluated according to the worst environment and worst equilibrium in that environment. It identifies a non-equilibrium property of auctions that governs whether or not their worst-case equilibria are good for welfare and revenue. This property is easy to analyze, can be refined from data, and composes across markets where multiple auctions are run simultaneously.