Ascending Auctions with Package Bidding

Abstract

Abstract. A benchmark "package auction" is introduced in which bidders may determine their own packages on which to bid. If all bidders bid straightforwardly, then the outcome is a point in the core of the exchange economy that minimizes the seller's revenue. When goods are substitutes, straightforward bidding strategies comprise an ex post Nash equilibrium. Compared to the Vickrey auction, the benchmark ascending package auction has cheaper information processing, better handling of budget constraints, and less vulnerability to joint bidding strategies among bidders who would otherwise be losers. Improvements are suggested that speed the auction and limit opportunities for collusion.

Characterizing the Incentive Compatible and Pareto Optimal Efficiency Space for Two Players, k Items, Public Budget and Quasilinear Utilities

“…Third, we show that combinatorial auctions with a multidimensional-type model in a rich preference space of 2 k outcomes require only VCG in order to fulfill the basic properties above when one of the players might be constrained by a budget and the allocation of the all-item bundle is nonarbitrary. This aspect of the contribution shows that [7]'s characterization of the submodularity effect on efficient non-constrained combinatorial auctions with quasilinear utility and a two player model carries to budgeted settings as our two player model trivially holds the coalitional submodularity property.…”

“…A related result in the area of non-constrained combinatorial auctions is [7]. The authors of [7] characterize non-constrained combinatorial auctions that are resilient to coalition defection and false-name bidding phenomena.…”

“…The authors of [7] characterize non-constrained combinatorial auctions that are resilient to coalition defection and false-name bidding phenomena. Under our assumption of quasilinear utility and the two player model, [7]'s result reduces to efficient dominant-strategy incentive compatible mechanism characterization. They [7] define a restriction on the valuations (named bidder-submodularity) that trivially holds in the two player model.…”

“…The authors of [7] observed a dependency between the combinatorial efficiency space and the players' preferences in the non-constrained combinatorial auctions model. They [7] investigated the effect of the submodularity of players' coalitional preferences, i.e., nondecreasing marginal coalitional social welfare, on coalition deviation-resilient mechanisms, which in a two player model is equivalent to dominant-strategy incentive compatible mechanisms.…”

“…They [7] investigated the effect of the submodularity of players' coalitional preferences, i.e., nondecreasing marginal coalitional social welfare, on coalition deviation-resilient mechanisms, which in a two player model is equivalent to dominant-strategy incentive compatible mechanisms. When no budgets exist and two players are assumed, [7] proved that when players' coalitional preferences are submodular, then the VCG mechanism is among the efficient 2 and dominant-strategy incentive compatible mechanisms. Moreover, it is the only Pareto-optimal mechanism among the efficient and dominant-strategy incentive compatible mechanisms.…”