Differential -Revelation VCG Mechanisms for Combinatorial Auctions

  • Authors:
  • Wolfram Conen;Tuomas Sandholm

  • Affiliations:
  • -;-

  • Venue:
  • AAMAS '02 Revised Papers from the Workshop on Agent Mediated Electronic Commerce on Agent-Mediated Electronic Commerce IV, Designing Mechanisms and Systems
  • Year:
  • 2002

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Abstract

Combinatorial auctions, where bidders can submit bids on bundles of items, are economically efficient mechanisms for selling items to bidders, and are attractive when the bidders' valuations on bundles exhibit complementarity and/or substitutability. Determining the winners in such auctions is a complex optimization problem that has received considerable research attention during the last 4 years. An equally important problem, which has only recently started to receive attention, is that of eliciting the bidders' preferences so that they do not have to bid on all combinations [6,8]. Preference elicitation has been shown to be remarkably effective in reducing revelation [13]. In this paper we introduce a new family of preference elicitation algorithms. The algorithms in this family do not rely on absolute bids, but rather on relative (differential) value information. This holds the promise to reduce the revelation of the bidders' valuations even further. We develop a differential-elicitation algorithm that finds the efficient allocation of items to the bidders, and as a side-effect, the Vickrey payments (which make truthful bidding incentive compatible). We also present two auction mechanisms that use differential elicitation: the difference mechanism and the difference increment mechanism.