Decision Support for Multiple-Unit Combinatorial Auctions Seminar 5.12.07

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Decision Support for Multiple-Unit Combinatorial
AuctionsSeminar 5.12.07

• Riikka-Leena Leskelä (rleskela_at_cc.hut.fi)
• Supervisors Hannele and Jyrki Wallenius

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Background

• What has been done
• Computational aspects of combinatorial auctions
• Design of iterative (efficient) auction
  mechanisms price feedback
• Preference elicitation
• What has not been done
• Support for bidders in constructing new bids
• Especially in the multiple-unit setting, which
  usually ignored price and quantity feedback

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Research

• Design of the Quantity Support Mechanism
• An MILP solving for profit maximizing bids (qs
  and p) that team up with other bids to become
  winners
• Testing the QSM with simulations
• Final cost to the buyer
• Efficiency of the final allocation

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Main Findings

• QSM decreases total cost to buyer and improves
  efficiency
• Shortcoming QSM solves for one new bid at a time
• It wont suggest a good bid, if complements for
  the bid are not in the bid stream already

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Conclusion

• Provide quantity support for bidders
• not considered in previous literature
• Next
• Extending QSM for groups of bidders to overcome
  the problems caused by considering only one
  incoming bid at a time
• Testing with human subjects

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Key References

• Good review of combinatorial auctions
• Pekec and Rothkopf (2003), Combinatorial Auction
  Design, Management Science 49 1485-1503.
• About the Quantity Support Mechanism
• Leskelä, Teich, Wallenius H. and Wallenius J.
  (2007), Decision Support for Combinatorial Bundle
  Auctions, Decision Support Systems 43 420- 434.