Multiattribute Auctions Based on Generalized Additive Independence

We develop multiattribute auctions that accommodate generalized additive independent (GAI) preferences. We propose an iterative auction mechanism that maintains prices on potentially overlapping GAI clusters of attributes, thus decreases elicitation and computational burden, and creates an open competition among suppliers over a multidimensional domain. Most significantly, the auction is guaranteed to achieve surplus which approximates optimal welfare up to a small additive factor, under reasonable equilibrium strategies of traders. The main departure of GAI auctions from previous literature is to accommodate non-additive trader preferences, hence allowing traders to condition their evaluation of specific attributes on the value of other attributes. At the same time, the GAI structure supports a compact representation of prices, enabling a tractable auction process. We perform a simulation study, demonstrating and quantifying the significant efficiency advantage of more expressive ...

• Type: Journal
• Year: 2010
• Where: JAIR
• Authors: Yagil Engel, Michael P. Wellman
• Keywords: Auctions, GAI Auctions, JAIR 2010, Multiattribute Auctions