Using the hotel price prediction module as described in Section 4, coupled with a model of its own effect on the economy, ATTac-2001 is equipped to determine its bids for hotel rooms.
Every minute, for each hotel auction that is still open, ATTac-2001 assumes that auction will close next and computes the marginal value of that hotel room given the predicted closing prices of the other rooms. If the auction does not close next, then it assumes that it will have a chance to revise its bids. Since these predicted prices are represented as distributions of possible future prices, ATTac-2001 samples from these distributions and averages the marginal values to obtain an expected marginal value. Using the full minute between closing times for computation (or 30 seconds if there are still flights to consider too), ATTac-2001 divides the available time among the different open hotel auctions and generates as many price samples as possible for each hotel room. In the end, ATTac-2001 bids the expected marginal values for each of the rooms.
The algorithm is described precisely and with explanation in Table 7.
One additional complication regarding hotel auctions is that, contrary to one of our assumptions in Section 2.2 (Assumption 4), bids are not fully retractable: they can only be changed to $1 above the current ask price. In the case that there are current active bids for goods that ATTac-2001 no longer wants that are less than $1 above the current ask price, it may be advantageous to refrain from changing the bid in the hopes that the ask price will surpass them: that is, the current bid may have a higher expected value than the best possible new bid. To address this issue, ATTac-2001 samples from the learned price distribution to find the average expected values of the current and potential bids, and only enters a new bid in the case that the potential bid is better.
