An algorithm for computing the outcome of combinatorial auctions with proxy bidding

Combinatorial auctions are difficult to analyze in part because of the vast number of potential strategies available to the bidders. Proxy bidding interfaces limit the users’ strategic options by accepting a vector of values and then bidding according to a fixed strategy. However, proxy bidding requires the auctioneer essentially run the auction with the myopic bidders to determine the outcome. In addition to being very costly computationally, this process is only as accurate as the bid increment, and decreasing the bid increment greatly increases the running time. In this paper, we present an algorithm that computes the outcome of the proxy auction by examining only the events that cause the proxy bidders to change their behavior. This algorithm is much faster than actually running the auction, and computes exact solutions.

• Type: Conference
• Year: 2003
• Where: ACMICEC
• Authors: Peter R. Wurman, Gangshu Cai, Jie Zhong, Ashish Sureka
• Keywords: ACMICEC 2003, Auction, Bid Increment, ECommerce, Proxy Bidding