Robust combinatorial auction protocol against false-name bids.

  • Authors:

  • Makoto Yokoo;Yuko Sakurai;Shigeo Matsubara

  • Affiliations:

  • NTT Communication Science Laboratories, Kyoto, Japan;NTT Communication Science Laboratories, Kyoto, Japan;NTT Communication Science Laboratories, Kyoto, Japan

  • Venue:
  • Artificial Intelligence
  • Year:
  • 2001

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Abstract

This paper presents a new combinatorial auction protocol that is robust against false-name bids. Internet auctions have become an integral part of Electronic Commerce (EC) and a promising field for applying agent and Artificial Intelligence technologies. Although the Internet provides an excellent infrastructure for combinatorial auctions, we must consider the possibility of a new type of cheating, i.e., an agent tries to profit from submitting several bids under fictitious names (false-name bids). If there exists no false-name bid, the Generalized Vickrey Auction protocol (GVA) satisfies individual rationality, Pareto efficiency, and incentive compatibility. On the other hand, when false-name bids are possible, it is theoretically impossible for a combinatorial auction protocol to simultaneously satisfy these three properties. Our newly developed Leveled Division Set (LDS) protocol, which is a modification of the GVA, utilizes reservation prices of auctioned goods for making decisions on whether to sell goods in a bundle or separately. The LDS protocol satisfies individual rationality and incentive compatibility even if agents can submit false-name bids, although it is not guaranteed to achieve a Pareto efficient social surplus. Simulation results show that the LDS protocol can achieve a better social surplus than that for a protocol that always sells goods in one bundle.