👉 Bids math, often used in the context of auctions and resource allocation, is a mathematical framework that models how bidders submit and compete for limited resources. It typically involves understanding the utility each bidder derives from acquiring a resource, which is influenced by factors like the resource's value, the bidder's cost of entry, and the number of bidders. The math includes calculating expected utilities based on probability distributions of other bidders' valuations and costs. Common models, such as the Vickrey-Clarke-Groves (VCG) mechanism, aim to design auctions that incentivize truthful bidding by ensuring each bidder's optimal strategy is to reveal their true valuation. This involves solving optimization problems to determine the optimal auction format and bid distribution that maximizes social welfare or achieves specific economic goals, while also ensuring fairness and efficiency in the allocation process.
