Iterative Combinatorial Auctions with Bidder-Determined Combinations
In combinatorial auctions, multiple distinct items are sold simultaneously and a bidder may place a single bid on a set (package) of distinct items. The determination of packages for bidding is a nontrivial task, and existing efficient formats require that bidders know the set of packages and/or their valuations. In this paper, we extend an efficient ascending combinatorial auction mechanism to use approximate single-item pricing. The single-item prices in each round are derived from a linear program that is constructed to reflect the current allocation of packages. Introduction of approximate single-item prices allows for endogenous bid determination where bidders can discover packages that were not included in the original bid set. Due to nonconvexities, single-item prices may not exist that are exact marginal values. We show that the use of approximate single-item prices with endogenous bidding always produces allocations that are at least as efficient as those from bidding with a fixed set of packages based on package pricing. A network resource allocation example is given that illustrates the benefits of our endogenous bidding mechanism.
Volume (Year): 51 (2005)
Issue (Month): 3 (March)
|Contact details of provider:|| Postal: |
Web page: http://www.informs.org/Email:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:51:y:2005:i:3:p:407-418. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If references are entirely missing, you can add them using this form.