369 research outputs found

    An Agent Based Market Design Methodology for Combinatorial Auctions

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    Auction mechanisms have attracted a great deal of interest and have been used in diverse e-marketplaces. In particular, combinatorial auctions have the potential to play an important role in electronic transactions. Therefore, diverse combinatorial auction market types have been proposed to satisfy market needs. These combinatorial auction types have diverse market characteristics, which require an effective market design approach. This study proposes a comprehensive and systematic market design methodology for combinatorial auctions based on three phases: market architecture design, auction rule design, and winner determination design. A market architecture design is for designing market architecture types by Backward Chain Reasoning. Auction rules design is to design transaction rules for auctions. The specific auction process type is identified by the Backward Chain Reasoning process. Winner determination design is about determining the decision model for selecting optimal bids and auctioneers. Optimization models are identified by Forward Chain Reasoning. Also, we propose an agent based combinatorial auction market design system using Backward and Forward Chain Reasoning. Then we illustrate a design process for the general n-bilateral combinatorial auction market. This study serves as a guideline for practical implementation of combinatorial auction markets design.Combinatorial Auction, Market Design Methodology, Market Architecture Design, Auction Rule Design, Winner Determination Design, Agent-Based System

    Efficiency Resource Allocation for Device-to-Device Underlay Communication Systems: A Reverse Iterative Combinatorial Auction Based Approach

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    Peer-to-peer communication has been recently considered as a popular issue for local area services. An innovative resource allocation scheme is proposed to improve the performance of mobile peer-to-peer, i.e., device-to-device (D2D), communications as an underlay in the downlink (DL) cellular networks. To optimize the system sum rate over the resource sharing of both D2D and cellular modes, we introduce a reverse iterative combinatorial auction as the allocation mechanism. In the auction, all the spectrum resources are considered as a set of resource units, which as bidders compete to obtain business while the packages of the D2D pairs are auctioned off as goods in each auction round. We first formulate the valuation of each resource unit, as a basis of the proposed auction. And then a detailed non-monotonic descending price auction algorithm is explained depending on the utility function that accounts for the channel gain from D2D and the costs for the system. Further, we prove that the proposed auction-based scheme is cheat-proof, and converges in a finite number of iteration rounds. We explain non-monotonicity in the price update process and show lower complexity compared to a traditional combinatorial allocation. The simulation results demonstrate that the algorithm efficiently leads to a good performance on the system sum rate.Comment: 26 pages, 6 fgures; IEEE Journals on Selected Areas in Communications, 201

    Truthful approximation mechanisms for restricted combinatorial auctions

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    When attempting to design a truthful mechanism for a computationally hard problem such as combinatorial auctions, one is faced with the problem that most efficiently computable heuristics can not be embedded in any truthful mechanism (e.g. VCG-like payment rules will not ensure truthfulness). We develop a set of techniques that allow constructing efficiently computable truthful mechanisms for combinatorial auctions in the special case where each bidder desires a specific known subset of items and only the valuation is unknown by the mechanism (the single parameter case). For this case we extend the work of Lehmann, O'Callaghan, and Shoham, who presented greedy heuristics. We show how to use If-Then-Else constructs, perform a partial search, and use the LP relaxation. We apply these techniques for several canonical types of combinatorial auctions, obtaining truthful mechanisms with provable approximation ratios

    An Overview of Combinatorial Auctions

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    An auction is combinatorial when bidders can place bids on combinations of items, called “packages,” rather than just individual items. Computer scientists are interested in combinatorial auctions because they are concerned with the expressiveness of bidding languages, as well as the algorithmic aspects of the underlying combinatorial problem. The combinatorial problem has attracted attention from operations researchers, especially those working in combinatorial optimization and mathematical programming, who are fascinated by the idea of applying these tools to auctions. Auctions have been studied extensively by economists, of course. Thus, the newly emerging field of combinatorial auctions lies at the intersection of computer science, operations research, and economics. In this article, we present a brief introduction to combinatorial auctions, based on our book, Combinatorial Auctions (MIT Press, 2006), in which we look at combinatorial auctions from all three perspectives.Auctions

    Design and Effects of Information Feedback in Continuous Combinatorial Auctions

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    Advancements in information technologies offer opportunities for designing and deploying innovative market mechanisms. For example, combinatorial auctions, in which bidders can bid on combinations of goods, can increase the economic efficiency of a trade when goods have complementarities. However, lack of real-time bidder support tools has been a major obstacle preventing this mechanism from reaching its full potential. This study uses novel feedback mechanisms to aid bidders in formulating bids in real-time to facilitate participation in continuous combinatorial auctions. Laboratory experiments examine the effectiveness of our feedback mechanisms; the study is the first to examine how bidders behave in such information-rich environments. Our results indicate that feedback results in higher efficiency and higher seller’s revenue compared to the baseline case where bidders are not provided feedback. Furthermore, contrary to conventional wisdom, even in complex economic environments, individuals effectively integrate rich information in their decision making

    Taking the Lab to the Field: Experimental Tests of Alternative Mechanisms to Procure Multiple Contracts

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    The first part of the paper reports the results from a sequence of laboratory experiments comparing the bidding behavior for multiple contracts in three different sealed bid auction mechanisms; first-price simultaneous, first-price sequential and first-price combinatorial bidding. The design of the experiment is based on experiences from a public procurement auction of road markings in Sweden. Bidders are asymmetric in their cost functions; some exhibit decreasing average costs of winning more than one contract, whereas other bidders have increasing average cost functions. The combinatorial bidding mechanism is demonstrated to be most efficient. The second part of the paper describes how the lab experiment was followed up by a field test of a combinatorial procurement auction of road markings.Multiple units, non-constant costs, asymmetric redemption values, alternative procurement mechanisms

    How Best to Auction Natural Resources

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    I study the design of auctions of natural resources, such as oil or mineral rights. A good auction design promotes both an efficient assignment of rights and competitive revenues for the seller. The structure of bidder preferences and the degree of competition are key factors in determining the best design. With weak competition and simple value structures, a simultaneous first-price sealed-bid auction may suffice. With more complex value structures, a dynamic auction with package bids likely is needed to promote efficiency and revenue objectives. Bidding on production shares, rather than bonuses, typically increases government take by reducing oil or mining company risk.Auctions, natural resource auctions, oil auctions
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