Advantages of AI in Auction Design

D3 - The Digital3 Podcast

In this episode of the D3 podcast, Professor Chris Berg sits down with Dr Peyman Khezr to discuss the intersection of artificial intelligence, market design, and human behaviour in the context of auctions.

Dr Khezr is the Deputy Director of the RMIT Business Behavioural Lab, a researcher at the RMIT Blockchain Innovation Hub and a Senior Lecturer of Economics at RMIT University. He is an applied microeconomist who applies behavioural and experimental methods in various contexts such as environmental markets, real estate, and the decentralised digital space.

Market design involves structuring markets to ensure they operate efficiently and fairly, and AI has revolutionised this field by enabling more accurate predictions and the processing of vast amounts of data.

Dr Khezr explains that the goals of auction design depend on the context, such as reducing carbon emissions or maximising seller revenue. Technology, particularly the internet and blockchain, has increased the demand for auctions and made them more complex. AI is now being used to simulate market behaviour and learn from real-world patterns, leading to more effective auction design. The research in this field has implications for public policy and can help improve the efficiency and fairness of auctions in various industries.

Takeaways

• Market design involves structuring markets to operate efficiently and fairly.
• AI has revolutionised market design by enabling more accurate predictions and processing of vast amounts of data.
• The goals of auction design depend on the context, such as reducing carbon emissions or maximising seller revenue.
• AI is being used to simulate market behaviour and learn from real-world patterns, leading to more effective auction design.

Chapters

00:00 Introduction

01:20 Market Design

02:32 Optimizing Auctions

05:17 Impact of Technology on Auctions

08:08 The Importance of Auction Design

10:09 Block Allocation Problem

12:27 Fairness in Auctions

14:23 AI in Auction Design

17:29 Learning Patterns in Auctions

21:00 Innovation in Auction Design

26:57 Policy Implications of Auction Design

31:22 Competition between Humans and AI in Auctions

33:12 Conclusion

Episode recorded 8 December 2023

Resources:

• RMIT Business Behavioural Lab
• RMIT Blockchain Innovation Hub
• Learn about emerging tech through D3 short online courses
• Follow D3 on and LinkedIn and Twitter to stay up to date with all our news and updates
• Watch D3 on YouTube
• Join the D3 Community for monthly updates on our new short course releases, upcoming events and latest partnerships and impact with the digital economy