An Optimal Multi-Unit Combinatorial Procurement Auction with Single Minded Bidders

Abstract: The current art in optimal combinatorial auctions is limited to handling the case of single units of multiple items, with each bidder bidding on exactly one bundle (single minded bidders). This paper extends the current art by proposing an optimal auction for procuring multiple units of multiple items when the bidders are single minded. The auction minimizes the cost of procurement while satisfying Bayesian incentive compatibility and interim individual rationality. Under appropriate regularity conditions, this optimal auction also satisfies dominant strategy incentive compatibility. This paper was presented at MCDES, a centenary conference of division of electrical sciences, Indian Institute of Science, Bangalore, May 2008.

• Type: Conference
• Year: 2008
• Where: IISc, Bangalore
• Authors: Sujit Guajr, Y Narahari
• Keywords: Bayesian Incentive Compatibility, Dominant Strategy Incentive Compatibility (DSIC), Individual Rationality (IR), Multi-Unit Combinatorial Procurement Auction, Optimal Mechanism