Choice of item pricing feedback schemes for multiple unit reverse combinatorial auctions

Authored by M. S. Iftekhar, A. Hailu, R. K. Lindner

Date Published: 2013-11

DOI: 10.1057/jors.2012.121

Sponsors: International Postgraduate Student Research Scholarship UWA Post-graduate Award Schemes

Platforms: No platforms listed

Model Documentation: Other Narrative Mathematical description

Model Code URLs: Model code not found

Abstract

Recently, interest in combinatorial auctions has extended to include trade in multiple units of heterogeneous items. Combinatorial bidding is complex and iterative auctions are used to allow bidders to sequentially express their preferences with the aid of auction market information provided in the form of price feedbacks. There are different competing designs for the provision of item price feedbacks; however, most of these have not been thoroughly studied for multiple unit combinatorial auctions. This paper focuses on addressing this gap by evaluating several feedback schemes or algorithms in the context of multiple unit auctions. We numerically evaluate these algorithms under different scenarios that vary in bidder package selection strategies and in the degree of competition. We observe that auction outcomes are best when bidders use a naive bidding strategy and competition is strong. Performance deteriorates significantly when bidders strategically select packages to maximize their profit. Finally, the performances of some algorithms are more sensitive to strategic bidding than others.

Tags

Agent-based model iterative combinatorial auction degree of competition item pricing feedback package selection strategy