Truth revelation in approximately efficient combinatorial auctions

Daniel Lehmann, Liaden Ita O'Callaghan, Yoav Shoham

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

125 Scopus citations

Abstract

Some important classical mechanisms considered in Microeconomics and Game Theory require the solution of a difficult optimization problem. This is true of mechanisms for combinatorial auctions, which have in recent years assumed practical importance, and in particular of the gold standard for combinatorial auctions, the Generalized Vickrey Auction (GVA). Traditional analysis of these mechanisms - in particular, their truth revelation properties - assumes that the optimization problems are solved precisely. In reality, these optimization problems can usually be solved only in an approximate fashion. We investigate the impact on such mechanisms of replacing exact solutions by approximate ones. Specifically, we look at a particular greedy optimization method, which has empirically been shown to perform well. We show that the GVA payment scheme does not provide for a truth revealing mechanism. We introduce another scheme that does guarantee truthfulness for a restricted class of players. We demonstrate the latter property by identifying sufficient conditions for a combinatorial auction to be truth-revealing, conditions which have applicability beyond the specific auction studied here.

Original languageEnglish
Title of host publicationProceedings of the 1st ACM Conference on Electronic Commerce, EC 1999
Pages96-102
Number of pages7
DOIs
StatePublished - 1999
Event1st ACM Conference on Electronic Commerce, EC 1999 - Denver, CO, United States
Duration: 3 Nov 19995 Nov 1999

Publication series

NameACM International Conference Proceeding Series

Conference

Conference1st ACM Conference on Electronic Commerce, EC 1999
Country/TerritoryUnited States
CityDenver, CO
Period3/11/995/11/99

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