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Combinatorial Auction Design

Listed author(s):
  • Aleksandar Peke\v{c}

    ()

    (Decision Sciences, The Fuqua School of Business, Duke University, Durham, North Carolina 27708-0120)

  • Michael H. Rothkopf

    ()

    (RUTCOR, Rutgers University, 640 Bartholomew Road, Piscataway, New Jersey 08854-8003)

Registered author(s):

    Combinatorial auctions have two features that greatly affect their design: computational complexity of winner determination and opportunities for cooperation among competitors. Dealing with these forces trade-offs between desirable auction properties such as allocative efficiency, revenue maximization, low transaction costs, fairness, failure freeness, and scalability. Computational complexity can be dealt with algorithmically by relegating the computational burden to bidders, by maintaining fairness in the face of computational limitations, by limiting biddable combinations, and by limiting the use of combinatorial bids. Combinatorial auction designs include single-round, first-price sealed bidding, Vickrey-Clarke-Groves (VCG) mechanisms, uniform and market-clearing price auctions, and iterative combinatorial auctions. Combinatorial auction designs must deal with exposure problems, threshold problems, ways to keep the bidding moving at a reasonable pace, avoiding and resolving ties, and controlling complexity.

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    File URL: http://dx.doi.org/10.1287/mnsc.49.11.1485.20585
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    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 49 (2003)
    Issue (Month): 11 (November)
    Pages: 1485-1503

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    Handle: RePEc:inm:ormnsc:v:49:y:2003:i:11:p:1485-1503
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    16. Rothkopf, Michael H & Teisberg, Thomas J & Kahn, Edward P, 1990. "Why Are Vickrey Auctions Rare?," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 94-109, February.
    17. Michael H. Rothkopf & Aleksandar Peke\v{c} & Ronald M. Harstad, 1998. "Computationally Manageable Combinational Auctions," Management Science, INFORMS, vol. 44(8), pages 1131-1147, August.
    18. Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
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    20. Hobbs, Benjamin F. & Rothkopf, Michael H. & Hyde, Laurel C. & O'Neill, Richard P., 2000. "Evaluation of a Truthful Revelation Auction in the Context of Energy Markets with Nonconcave Benefits," Journal of Regulatory Economics, Springer, vol. 18(1), pages 5-32, July.
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