False-name-proof combinatorial auction protocol: Groves Mechanism with SubModular Approximation

  • Authors:

  • Makoto Yokoo;Toshihiro Matsutani;Atsushi Iwasaki

  • Affiliations:

  • Kyushu University, Higashi-ku, Fukuoka, Japan;Kyushu University, Higashi-ku, Fukuoka, Japan;Kyushu University, Higashi-ku, Fukuoka, Japan

  • Venue:
  • AAMAS '06 Proceedings of the fifth international joint conference on Autonomous agents and multiagent systems
  • Year:
  • 2006

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Abstract

This paper develops a new combinatorial auction protocol called the Groves Mechanism with SubModular Approximation (GM-SMA). This protocol satisfies the following characteristics: (1) it is false-name-proof, (2) each winner is included in a Pareto efficient allocation, and (3) as long as a Pareto efficient allocation is achieved, the protocol is robust against the collusion of losers and the outcome is in the core. As far as the authors are aware, the GM-SMA is the first protocol that satisfies all three of these characteristics.The basic ideas of the GM-SMA are as follows: (i) It is based on the VCG protocol, i.e., the payment of a winner in this protocol is identical to the payment in one instance of the Groves mechanism, which is a class of protocols that includes the VCG. (ii) When calculating the payment of a bidder, we approximate the valuations of other bidders by using a submodular valuation function (submodular approximation). Simulation results show that the GM-SMA achieves a better social surplus and seller's revenue than existing false-name-proof protocols, as long as the submodular approximation is close enough to the original valuations.