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Quantum Auctions: Facts and Myths

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  • E. W. Piotrowski
  • J. Sladkowski
Abstract
Quantum game theory, whatever opinions may be held due to its abstract physical formalism, have already found various applications even outside the orthodox physics domain. In this paper we introduce the concept of a quantum auction, its advantages and drawbacks. Then we describe the models that have already been put forward. A general model involves Wigner formalism and infinite dimensional Hilbert spaces - we envisage that the implementation might not be an easy task. But a restricted model advocated by the Hewlett-Packard group seems to be much easier to implement. Simulations involving humans have already been performed. We will focus on problems related to combinatorial auctions and technical assumptions that are made. Quantum approach offers at least two important developments. Powerful quantum algorithms for finding solutions would extend the range of possible applications. Quantum strategies, being qubits, can be teleported but are immune from cloning - therefore extreme privacy of agent's activity could in principle be guaranteed. Then we point out some key problem that have to be solved before commercial use would be possible. With present technology, optical networks, single photon sources and detectors seems to be sufficient for experimental realization in the near future. We conclude by describing potential customers, estimating the potential market size and possible timing.

Suggested Citation

  • E. W. Piotrowski & J. Sladkowski, 2007. "Quantum Auctions: Facts and Myths," Papers 0709.4096, arXiv.org.
    • Handle: RePEc:arx:papers:0709.4096
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    References listed on IDEAS

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    1. Piotrowski, Edward W. & Sładkowski, Jan & Syska, Jacek, 2003. "Interference of quantum market strategies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 318(3), pages 516-528.
    2. Piotrowski, E.W & Sładkowski, J, 2002. "Quantum market games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 312(1), pages 208-216.
    3. Edward W. Piotrowski & Jan Sladkowski, "undated". "Quantum Game Theory in Finance," Departmental Working Papers 19, University of Bialtystok, Department of Theoretical Physics.
    4. Piotrowski, Edward W. & Sładkowski, Jan, 2003. "Quantum English auctions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 318(3), pages 505-515.
    5. Edward W. Piotrowski & Jan Sladkowski, "undated". "An Invitation to Quantum Game Theory," Departmental Working Papers 15, University of Bialtystok, Department of Theoretical Physics.
    6. Piotrowski, Edward W. & Sładkowski, Jan, 2002. "Quantum bargaining games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 308(1), pages 391-401.
    7. Navroz Patel, 2007. "States of play," Nature, Nature, vol. 445(7124), pages 144-146, January.
    8. Edward W. Piotrowski & Jan Sladkowski, "undated". "Quantum-Like Approach to Financial Risk: Quantum Anthropic Principle," Departmental Working Papers 8, University of Bialtystok, Department of Theoretical Physics.
    9. Flitney, A.P. & Abbott, D., 2003. "Quantum models of Parrondo's games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 152-156.
    10. Piotrowski, E.W. & Sładkowski, J., 2003. "The merchandising mathematician model: profit intensities," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 318(3), pages 496-504.
    11. Edward W. Piotrowski & Jan Sladkowski, "undated". "The Next Stage: Quantum Game Theory," Departmental Working Papers 18, University of Bialtystok, Department of Theoretical Physics.
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    Cited by:

    1. Marcin Makowski & Edward W. Piotrowski & Piotr Frk{a}ckiewicz & Marek Szopa, 2022. "Transactional Interpretation for the Principle of Minimum Fisher Information," Papers 2203.12607, arXiv.org.
    2. Łukasz Pawela & Piotr Gawron & Zbigniew Puchała & Jan Sładkowski, 2013. "Enhancing Pseudo-Telepathy in the Magic Square Game," PLOS ONE, Public Library of Science, vol. 8(6), pages 1-7, June.
    3. C. Gonçalves P., 2015. "Financial Market Modeling With Quantum Neural Networks," Review of Business and Economics Studies // Review of Business and Economics Studies, Финансовый Университет // Financial University, vol. 3(4), pages 44-63.
    4. Pineiro-Chousa, Juan & Vizcaíno-González, Marcos, 2016. "A quantum derivation of a reputational risk premium," International Review of Financial Analysis, Elsevier, vol. 47(C), pages 304-309.
    5. Jerzy Dajka & Dawid Kłoda & Marcin Łobejko & Jan Sładkowski, 2015. "Quantum Two Player Game in Thermal Environment," PLOS ONE, Public Library of Science, vol. 10(8), pages 1-13, August.
    6. Carlos Pedro Gonc{c}alves, 2011. "Quantum Financial Economics - Risk and Returns," Papers 1107.2562, arXiv.org, revised Jan 2012.
    7. Hanauske, Matthias & Kunz, Jennifer & Bernius, Steffen & König, Wolfgang, 2010. "Doves and hawks in economics revisited: An evolutionary quantum game theory based analysis of financial crises," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(21), pages 5084-5102.

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