Adaptive Pricing in Combinatorial Auctions

Sébastien Lahaie () and Benjamin Lubin ()
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Sébastien Lahaie: Google Research, New York, New York 10011
Benjamin Lubin: Information Systems Department, Boston University, Boston, Massachusetts 02215

Management Science, 2025, vol. 71, issue 10, 8967-8993

Abstract: We introduce the first adaptively priced iterative combinatorial auction design, which gradually extends price expressiveness as the rounds progress. This mechanism achieves both high efficiency and fast convergence across a wide range of valuation domains. We implement our auction design using polynomial prices, show how to detect when the current price structure is insufficient to clear the market, and show how to correctly expand the polynomial structure to guarantee progress. An experimental evaluation confirms that our auction is competitive with bundle-price auctions in domains where these excel, namely multiminded valuations, but also performs well in domains favorable to linear prices, such as valuations with pairwise synergy.

Keywords: combinatorial auctions; adaptive pricing; polynomial prices; market clearing (search for similar items in EconPapers)
Date: 2025
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