Towards Fast Vickrey Pricing using Constraint Programming

Ensuring truthfulness amongst self-interested agents bidding against one another in an auction can be computationally expensive when prices are determined using the Vickrey-Clarke-Groves (VCG) mechanism. VCG guarantees that each agent's dominant strategy is to tell the truth, but it requires solving n + 1 optimization problems where the overall optimal solutions involves n agents. This paper first examines a case-study example demonstrating how Operations Research techniques can be used to compute Vickrey prices efficiently. In particular, the casestudy focuses on the Assignment Problem. We show how Vickrey prices can be computed in the same asymptotic time complexity as that of the original optimization problem. This case-study can be seen as serving a pedagogical role in the paper illustrating how Operations Research techniques can be used for fast Vickrey pricing. We then propose a Constraint Programming (CP) approach which can be used in a more general context, where nothing i...

• Type: Journal
• Year: 2004
• Where: AIR
• Authors: Alan Holland, Barry O'Sullivan
• Keywords: AIR 2004, Operations Research, Optimization Problem, Vickrey Pricing