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game balancing auctions

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TDang
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I'm thinking of applying auction theory to the game-balancing auctions which sound like they're so popular in eurogames. Hovever, I've only played a few of these myself. I wanted to get feedback on whether my understanding of the general structure of these auctions is correct. Mostly, I'm basing my understanding on "Heart of Africa" (which I also might get partly wrong, since I don't have it handy).

  1. There's an auction for something which is of significant strategic value, with the auction repeated several times throughout the game (it's not a one-time thing), so it's an auction for turn order, or some such.
  2. The auction might be an open-bid, round robin (in which case does the rule about who starts the bidding matter?) or a sealed-bid (secret and simultaneous bidding).
  3. It's an "all-pay" auction, meaning that everyone pays their bid whether they win the auction or not.
  4. The players have some secret conditions which affect how valuable the auction item is to them (for instance, face-down cards). (Note that the auction "item" might be the right to choose among several options.)
  5. The earnings from the auction are redistributed to the players according to some rules (generally balancing rules, favoring those who are somehow disadvantaged).

Does that pretty much capture it? Am I missing an important element, or getting something completely wrong? Or, on the other hand, are these game-balacning auctions much more varied than my outline implies?

irdesigns510
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ive never seen an "all pay" auction

"all pay" auctions sound brutal, especially if you can draw out another persons bids and then still win.
sounds like players can win by attrition.

i personally love the secretiveness of auctions, its a psychological "out-of-game" mechanic that exists in a similar realm to bluffing.

all said, you seem to have them mapped out pretty well.
One thing to test might be a "buy it now" value, like they have on eBay.

Koen Hendrix
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One item or more?

The "all pay" auctions aren't as brutal if there's still something for the second-higgest, third-highest ets players to get. If there's only one thing up for auction, like buying an artifact, it seems strange that everyone would have to pay even if recieving nothing. You're almost punishing players for participating in the auction. But if there's more up for grabs (like highest bidder goes first, second highest goes second etc) it is very reasonable to have everyone pay.

Koen

irdesigns510
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i did find it strange

i guess it was just how #3 was worded.
but what you are saying makes more sense.

TDang
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yep, all-pay auction

It might be weird sounding, but irdesigns510, you read it correctly. If I recall correctly, Heart of Africa (and I think some other games with auctions, maybe the old version of Shogun?) had all-pay auctions, which really did mean that the single winner won the (potentially very valuable) prize (like going first), but everyone else had to pay their bid also.

All-pay auctions have been studied a bit by economists, but usually not as real auctions, instead used as a model of certain kinds of competition-like a race to do R&D on a new product, or lobbying semi-corrupt public officials. I think that experiments show that you're right, and that people seriously overpay in these auctions. That doesn't feel like it matches my experience from games, where I've always felt the bidding was on the low side. I'll have to think about that more.

Anyway, for the purposes of this discussion, I guess what I'm curious about is not whether the all-pay auction is crazy, but whether it's what's actually used a lot.

ReneWiersma
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All-pay auctions are usually

All-pay auctions are usually simultaneous blind auctions (sealed bid). All-pay in combination with round-robin seems kind of weird, but is not impossible I guess. All-pay is definitely not used a lot, especially when only the highest bidder receives a prize. The downside of becoming second in the auction is just too big a negative in a serious strategic game. In a more light-hearted game, it can be a fun mechanic though.

There are many different kind of auctions. What kind of auction works best depends on what you are exactly trying to achieve.

stubert
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all pay

The only "all pay" auction I've seen is in Shogun (currently named "Samurai Swords"), in which players bid for the ninja and turn order. The benefits to choosing your turn order (usually a player will choose to go first or last) and hiring the ninja are great (and the DISadvantages if another player DOES win the ninja or turn order choice are also great), but if you are not the high bidder, you lose that money (koku).

TWO AUCTION STYLES I HAVE USED:

Style 1:

I have used a form of the simultaneous secret bidding style in which ONLY the high and low bidder pay, with a minimum bid and no ability to opt out, meaning that essentially you must pay to opt out of an auction (since you could just bid the minimum and be the low bidder). It also increases the chance that there will be more competitive bidding. If you don't want what is being bid on AND you don't want to pay, you must try to NOT be the highest or lowest bidder, but if you bid a moderate amount and everyone else still outbids you, you still have to pay.

Style 2:

I also have a bidding style in which everyone must participate in the auction, and may place between 1-3 "money" cards in to bid. Only the number of cards is visible to players before the reveal (it is very likely that a player will have a single money card with a high enough value to beat 3 other money cards - it comes down to whether they are willing to spend it for the item up for bid), creating a secondary bluffing mechanic, since players do not have to bid in any particular order, so players can wait to see what other players do before they place all of their cards. Cards can be added to a bid, but not taken away once they are submitted - this, like poker, can cause a bluffing/bidding mechanic that is actually quite intriguing. Once either all players have 3 cards in for bid or all players state that their bids are final, the bids are revealed and the high bidder wins, with all losing players forfeiting the LOWEST money card submitted for bid. If there is a tie for highest bidder, the item goes to the LOW bidder (who pays, with all other players forfeiting their lowest money card submitted).

Money cards have values from $0 to $100,000 - so you could conceivably throw in 3 $0 bidding cards, making your opponent think that he has to try to outbid you, but when he spends a $30,000 card to try to outbid your 3 cards, he finds out that you bluffed him and caused him to severely overpay. The other players losing their lowest money card will eventually pull out all of the $0 money cards to reduce the ability of other players to bluff.

TDang
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guess I need to do more research

Thanks all. It seems my memory is faulty in thinking that all-pay is typical. Now I have to go actually go do the research, blah.

If it turns out that the auctions are wildly disparate, then there might be no useful analysis for me to do.

ReneWiersma
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TDang wrote:If it turns out

TDang wrote:
If it turns out that the auctions are wildly disparate, then there might be no useful analysis for me to do.

I'm wondering what you are exactly trying to analyse?

TDang
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analyze what?

ReneWiersma wrote:
I'm wondering what you are exactly trying to analyse?

Well, that's a good question, and the answer still fuzzy. Suppose there WAS a specific kind of auction which was used consistently in games. I could try to do a formalized prediction for how people behave in such auctions, so how they're likely to turn out. That might be the end of it, and fun for its own sake.

What I'd be really hoping for is that the art of game design would have concentrated on auction structures which are applicable to different, real-world problems, and I could take the combination od how I see them used in games and the result of the formal analysis to try to fit them into such problems.

ReneWiersma
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The most common kind of

The most common kind of auction is probably round-robin, open bidding, once a player has passed he may not re-enter the bidding. One item per auction, and the item up for auctioning may or may not have a different value to different players. Don't know how that relates to any real world problem, though.

stubert
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game theory

This sounds like a game theory question.

Since Sun Tzu wrote "Art of War", philosophers have been applying "game theory" to real life.

Are you trying to use the psychology behind player decisions to real-world applications as a predictive tool to study human psychology as it relates to interpersonal adversarial interaction?

Evil ColSanders
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Thee BEST bidding system,

Thee BEST bidding system, IMO, is "For Sale".
Starts with Open Bid. Then, either Raise or take the lowest card and half of the bid you made. (If you made none, no payment needed.
After all cards are sold, Simultaneous Bidding occurs for a new set of cards using the cards that were purchased earlier.

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