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Competing Combinatorial Auctions

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  • Kittsteiner, Thomas
  • Ott, Marion
  • Steinberg, Richard

Abstract

We investigate whether revenue-maximizing auctioneers selling heterogeneous items will allow for combinatorial bidding in the presence of auctioneer competition. We compare the choice of auction format by two competing auctioneers with that of a single auctioneer. Bidders are heterogeneous in their demands, with some having synergies for items. We find that, even if a single auctioneer offers a combinatorial auction, competing auctioneers in a comparable setting will not. Instead, the competing auctioneers will segment the market by restricting allowable package bids in order to increase competition between bidders. This shows that it might not be advantageous for an online market platform to offer combinatorial auctions as a design option to competing auctioneers. History: This paper has been accepted for the Information Systems Research Special Section on Market Design and Analytics. Funding: Financial support from the Deutsche Forschungsgemeinschaft [Grants KI 1915/1-1 and OT 487/2-1] is gratefully acknowledged by T. Kittsteiner and M. Ott. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2021.1018 .
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Suggested Citation

  • Kittsteiner, Thomas & Ott, Marion & Steinberg, Richard, 2017. "Competing Combinatorial Auctions," EconStor Preprints 171995, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:171995
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    More about this item

    Keywords

    Auctioneer competition; Combinatorial auctions; VCG mechanism;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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