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Differential-Revelation VCG Mechanisms for Combinatorial Auctions

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Agent-Mediated Electronic Commerce IV. Designing Mechanisms and Systems (AMEC 2002)

Part of the book series: Lecture Notes in Computer Science ((LNAI,volume 2531))

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Abstract

Combinatorial auctions, where bidders can submit bids on bundles of items, are economically efficient mechanisms for selling items to bidders, and are attractive when the bidders’ valuations on bundles exhibit complementarity and/or substitutability. Determining the winners in such auctions is a complex optimization problem that has received considerable research attention during the last 4 years. An equally important problem, which has only recently started to receive attention, is that of eliciting the bidders’ preferences so that they do not have to bid on all combinations [6],[8]. Preference elicitation has been shown to be remarkably effective in reducing revelation [13]. In this paper we introduce a new family of preference elicitation algorithms. The algorithms in this family do not rely on absolute bids, but rather on relative (differential) value information. This holds the promise to reduce the revelation of the bidders’ valuations even further. We develop a differential-elicitation algorithm that finds the efficient allocation of items to the bidders, and as a side-effect, theVickrey payments (which make truthful bidding incentive compatible). We also present two auction mechanisms that use differential elicitation: the difference mechanism and the difference increment mechanism.

Dr. Sandholm’s work was funded by, and conducted at, CombineNet, Inc., 311 S. Craig St., Pittsburgh, PA 15213.

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Author information

Authors and Affiliations

  1. Xonar GmbH, Wodanstr.7, 42555, Velbert, Germany

    Wolfram Conen

  2. Computer Science Department, Carnegie Mellon University, 5000 Forbes Avenue, 15213, PA, Pittsburgh

    Tuomas Sandholm

Authors
  1. Wolfram Conen
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  2. Tuomas Sandholm
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Editor information

Editors and Affiliations

  1. University of Bath, Bath, UK

    Julian Padget

  2. IBM - Haifa Research Labs, Haifa University, Israel

    Onn Shehory

  3. Maxwell Dworkin Lab, Cambridge, MA, USA

    David Parkes

  4. Carnegie Mellon University, Pittsburgh, PA, USA

    Norman Sadeh

  5. IBM T.J. Watson Research Center, Harthorne, NY, USA

    William E. Walsh

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© 2002 Springer-Verlag Berlin Heidelberg

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Conen, W., Sandholm, T. (2002). Differential-Revelation VCG Mechanisms for Combinatorial Auctions. In: Padget, J., Shehory, O., Parkes, D., Sadeh, N., Walsh, W.E. (eds) Agent-Mediated Electronic Commerce IV. Designing Mechanisms and Systems. AMEC 2002. Lecture Notes in Computer Science(), vol 2531. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-36378-5_3

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  • DOI: https://doi.org/10.1007/3-540-36378-5_3

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-00327-4

  • Online ISBN: 978-3-540-36378-1

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