Combinatorial Auction Design

Aleksandar Peke\v{c} () and Michael H. Rothkopf ()
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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

Management Science, 2003, vol. 49, issue 11, 1485-1503

Abstract: 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.

Keywords: Auction Design; Combinatorial Bidding; Bidding with Synergies (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68)

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