Truthful volume discount mechanism based on combinatorial double auction

Abstract

In the auction market, allocation and pricing will affect participants’ behavior, honesty, and the success of the auction. A proper mechanism will help to achieve higher utility. In a combinatorial double auction, buyers bidding for commodity combinations of different sellers solve the problem of resource allocation in the real market more efficiently. In view of the problem of allocation and pricing of resource such as cloud resource allocation and spectrum auction, this paper designs the TCD4GB mechanism based on the scene of combined double auction, which determines winners, allocates goods and calculates payments. The concept of unit difference is introduced to this paper in order to solve winner determination problem in the group-buying mechanism. The matched sellers who have the minimum cost is directly chosen to be the winning sellers in the process of selecting the winning buyers. The mechanism also calculates payment by using the unit difference of overlapping buyers and apportion it to the matching sellers through the idea of second-price in VCG mechanism. This mechanism avoids the higher utility of buyers when they report falsely. Through theoretical and simulation experiments, it is proved that the TCD4GB mechanism satisfies the economic attributes of individual rationality and budget balance.