Combinatorial Auctions

Combinatorial Auctions

A synthesis of theoretical and practical research on combinatorial auctions from the perspectives of economics, operations research, and computer science.

A STUDY IN COMBINATORIAL AUCTIONS.

By the emergence of electronic commerce and low transaction costs on the Internet, an interest in the design of new auction mechanisms has been arisen. Recently many researchers in computer science, economics, business, and game theory have presented many valuable studies on the subject of online auctions, and auctions theory. When faced from a computational perspective, combinatorial auctions are perhaps the most challenging ones. Combinatorial auctions, that is, auctions where bidders can bid on combinations of items, tend to lead to more efficient allocations than traditional auction mechanisms in multi-item multi-unit situations where the agents’ valuations of the items are not additive. However, determining the winners to maximize the revenue is NP-complete. In this study, we first analyze the existing approaches for combinatorial auction problem. Based on this analysis, we then choose three different approaches, which are search approach, descending simultaneous auctions approach, and IP (Integer Programming) formulation approach to build our models. The performances of the models are compared using computer simulations, where we model bandwidth allocation system. Finally a combinatorial auction tool is built which can be used for online auctions and e-procurement systems.

Combinatorial Auctions