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Multi-object auctions with package bidding: An experimental comparison of Vickrey and iBEA

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  • Chen, Yan
  • Takeuchi, Kan

Abstract

The use of package auctions for complex resource allocation has been rapidly increasing in recent years. In this paper, we study two package auction mechanisms in a laboratory setting, a sealed bid Vickrey auction and an ascending version of Vickrey, the iBEA auction. Unlike the single-unit Vickrey auction, where bidders tend to overbid in the laboratory, most of our bidders either underbid or bid their true values. Furthermore, at the aggregate level, while the Vickrey auction generates significantly higher revenue than does iBEA, the iBEA auction generates significantly higher bidder profit and efficiency. Additionally, a significantly larger proportion of iBEA auctions achieves 100% efficiency than does the Vickrey auction. We also find that human bidders learn from their robot opponents when the robot strategies are (myopic) best responses.

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  • Chen, Yan & Takeuchi, Kan, 2010. "Multi-object auctions with package bidding: An experimental comparison of Vickrey and iBEA," Games and Economic Behavior, Elsevier, vol. 68(2), pages 557-579, March.
  • Handle: RePEc:eee:gamebe:v:68:y:2010:i:2:p:557-579
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    4. Kan Takeuchi & John Lin & Yan Chen & Thomas Finholt, 2010. "Scheduling with package auctions," Experimental Economics, Springer;Economic Science Association, vol. 13(4), pages 476-499, December.
    5. Heczko, Alexander & Kittsteiner, Thomas & Ott, Marion, 2018. "The Performance of Core-Selecting Auctions: An Experiment," EconStor Preprints 176842, ZBW - Leibniz Information Centre for Economics.
    6. Hitoshi Matsushima, 2015. "Connected Price Dynamics with Revealed Preferences and Auctioneer’s Discretionin VCG Combinatorial Auction (Published in the B. E. Journal of Theoretical Economics 18 (1), 2018.)," CARF F-Series CARF-F-359, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
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    8. Chernomaz, Kirill & Levin, Dan, 2012. "Efficiency and synergy in a multi-unit auction with and without package bidding: An experimental study," Games and Economic Behavior, Elsevier, vol. 76(2), pages 611-635.
    9. Christoph March, 2019. "The Behavioral Economics of Artificial Intelligence: Lessons from Experiments with Computer Players," CESifo Working Paper Series 7926, CESifo.
    10. Filiz-Ozbay, Emel & Lopez-Vargas, Kristian & Ozbay, Erkut Y., 2015. "Multi-object auctions with resale: Theory and experiment," Games and Economic Behavior, Elsevier, vol. 89(C), pages 1-16.
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    12. Yan Chen & Ming Jiang & Onur Kesten & Stéphane Robin & Min Zhu, 2017. "Matching in the Large: An Experimental Study," Working Papers 1702, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
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    14. Simon Loertscher & Leslie M. Marx & Tom Wilkening, 2015. "A Long Way Coming: Designing Centralized Markets with Privately Informed Buyers and Sellers," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 857-897, December.
    15. M. S. Iftekhar & A. Hailu & R. K. Lindner, 2014. "Does It Pay to Increase Competition in Combinatorial Conservation Auctions?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(3), pages 411-433, September.
    16. Iftekhar, Md Sayed & Tisdell, John G., 2015. "Bidding and performance in multiple unit combinatorial fishery quota auctions: Role of information feedbacks," Marine Policy, Elsevier, vol. 62(C), pages 233-243.
    17. Satoshi Takahashi & Yoichi Izunaga & Naoki Watanabe, 2018. "An approximation algorithm for multi-unit auctions: numerical and subject experiments," Operations Research and Decisions, Wroclaw University of Technology, Institute of Organization and Management, vol. 1, pages 95-115.
    18. Anthony M. Kwasnica & Katerina Sherstyuk, 2013. "Multiunit Auctions," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 461-490, July.
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