Allocative efficiency in simulated multiple-unit combinatorial auctions with quantity support

Valtteri Ervasti and Riikka-Leena Leskelä

European Journal of Operational Research, 2010, vol. 203, issue 1, 251-260

Abstract: We study the behavior of the Quantity Support Mechanism, a support tool, which suggests new bids for bidders in semi-sealed-bid combinatorial auctions. The support tool gives bidders a shortlist of provisionally winning bids (price-quantity combinations) they can choose from. We conducted a series of simulations to test the efficiency of the final allocations in the auctions. Our results indicate that quantity support auctions are more efficient than auctions without it, although the theoretical optimum is not always reached. Also, in our experiments, quantity support auctions led to a lower total cost to the buyer than non-combinatorial auctions, where the items were auctioned individually. The simulation results also show that the QSM cannot entirely overcome the threshold problem and what we call the "puzzle problem".

Keywords: Auctions/bidding; Decision; support; systems; Combinatorial; auctions (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:203:y:2010:i:1:p:251-260

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