An Agent Based Market Design Methodology for Combinatorial Auctions

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

Testing BOI and BOB algorithms for solving the Winner Determination

Eighth International Conference on Hybrid Intelligent Systems, 2008. HIS '08. Barcelona, 10-12 September 2008Combinatorial auctions are a promising auction format for allocating radio spectrum, as well as other goods. An important handicap of combinatorial auctions is determining the winner bids among many options, that is, solving the winner determination problem (WDP). This paper tackles this computational problem using two approaches in a combinatorial first-price sealed bid auction. The first one, is an A* based on items (BOI). The second one, is an A* based on bids (BOB). These two techniques are tested in several scenarios for allocating radio spectrum licenses. The results obtained reveal that the search algorithm A* with the BOB formulation outperforms the other and always finds the optimal solution very quickly

Computational Mechanism Design: A Call to Arms

Game theory has developed powerful tools for analyzing decision making in systems with multiple autonomous actors. These tools, when tailored to computational settings, provide a foundation for building multiagent software systems. This tailoring gives rise to the field of computational mechanism design, which applies economic principles to computer systems design

Matrix bids in combinatorial auctions: expressiveness and micro-economic properties

A combinatorial auction is an auction where multiple items are for sale simultaneously to a set of buyers. Furthermore, buyers are allowed to place bids on subsets of the available items. This paper focuses on a combinatorial auction where a bidder can express his preferences by means of a so-called ordered matrix bid. Ordered matrix bids are a bidding language that allows a compact representation of a bidder''s preferences, and was developed by Day (2004). We give an overview of how a combinatorial auction with matrix bids works. We elaborate on the relevance of the matrix bid auction and we develop methods to verify whether a given matrix bid satisfies properties related to micro-economic theory as free disposal, subadditivity, submodularity and the gross substitutes property. Finally, we investigate how a collection of arbitrary bids can be represented as a matrix bid.microeconomics ;

Combinatorial auctions for electronic business

Combinatorial auctions (CAs) have recently generated significant interest as an automated mechanism for buying and selling bundles of goods. They are proving to be extremely useful in numerous e-business applications such as e-selling, e-procurement, e-logistics, and B2B exchanges. In this article, we introduce combinatorial auctions and bring out important issues in the design of combinatorial auctions. We also highlight important contributions in current research in this area. This survey emphasizes combinatorial auctions as applied to electronic business situations

A winner determination algorithm for multi-unit combinatorial auctions with reserve prices

Combinatorial auction mechanisms have been used in many applications such as resource and task allocation, planning and time scheduling in multi-agent systems, in which the items to be allocated are complementary or substitutable. The winner determination in combinatorial auction itself is a NP-complete problem, and has attracted many attentions of researchers world wide. Some outstanding achievements have been made including CPLEX and CABOB algorithms on this topic. To our knowledge, the research into multi-unit combinatorial auctions with reserve prices considered is more or less ignored. To this end, we present a new algorithm for multi-unit combinatorial auctions with reserve prices, which is based on Sandholm\u27s work. An efficient heuristic function is developed for the new algorithm. Experiments have been conducted. The experimental results show that auctioneer agent can find the optimal solution efficiently for a reasonable problem scale with our algorithm. <br /