Price of Anarchy of First-Price Auctions in Agentic Markets
An agentic market is a decentralized serving-time market where AI agents bid to claim each user prompt. An agent's bid is based on its expected value for the prompt, which is the expectation of the reward for its response minus its inference costs. First-price auctions (FPAs), in which the highest bidder pays its bid and receives the prompt, are a natural way to allocate prompts in such a market, since they are simple and transparent to run, and do not require central knowledge of private capabilities and costs. However, FPAs are not truthful: participants may bid less than their true value in the hope of a larger profit, and the prompt may then be allocated to someone other than the bidd...
| Authors | Shubhendu Trivedi, Jacob Eisenstein, Alekh Agarwal et al. |
|---|---|
| Primary category | cs.GT |
| Published | 14 October 2026 |
| Last updated at source | 14 October 2026 |
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