Iterative Dutch combinatorial auctions

Abstract

The combinatorial auction problem can be modeled as a weighted set packing problem. Similarly the reverse combinatorial auction can be modeled as a weighted set covering problem. We use the set packing and set covering formulations to suggest novel iterative Dutch auction algorithms for combinatorial auction problems. We use generalized Vickrey auctions (GVA) with reserve prices in each iteration. We prove the convergence of the algorithms and show that the solutions obtained using the algorithms lie within provable worst case bounds. We conduct numerical experiments to show that in general the solutions obtained using these algorithms are much better than the theoretical bounds.