Binary Vickrey auction - A robust and efficient multi-unit sealed-bid online auction protocol against buyer multi-identity bidding

The multi-unit Vickrey-Clark-Groves (VCG) mechanism has two major weaknesses: it has high computational complexity and monotonicity problems [Paul Milgrom. Putting Auction Theory to Work. Cambridge University Press, Cambridge, UK, 2004] such that if goods are not substitutes for all bidders and if a bidder can submit bids under multiple identities, then the VCG is no longer strategy-proof. To address these two weaknesses, we introduce a Binary Vickrey Auction (BVA) where goods are allocated in bundles of sequentially-decreasing power-of-two items in multiple rounds. Because of the discrete allocation operations, the BVA is computationally efficient. It is also robust against buyer multi-identity bidding by discouraging a bidder splitting his single bid for a larger bundle into several bids under multiple bidder identities for smaller bundles because the BVA favors bids for larger bundles with earlier considerations and cheaper prices.

[1]  Makoto Yokoo,et al.  Robust Combinatorial Auction Protocol against False-Name Bids , 2000, AAAI/IAAI.

[2]  C. Avery,et al.  Bundling and Optimal Auctions of Multiple Products , 2000 .

[3]  Atanu R. Sinha,et al.  The Impact of Discrete Bidding and Bidder Aggressiveness on Sellers' Strategies in Open English Auctions: Reserves and Covert Shilling , 2000 .

[4]  R. Engelbrecht-Wiggans,et al.  Multi-unit auctions with uniform prices , 1998 .

[5]  Makoto Yokoo,et al.  A robust open ascending-price multi-unit auction protocol against false-name bids , 2003, EC '03.

[6]  Lawrence M. Ausubel,et al.  Demand Reduction and Inefficiency in Multi-Unit Auctions , 2014 .

[7]  E. H. Clarke.  Multipart pricing of public goods , 1971 .

[8]  Manuel Blum,et al.  Time Bounds for Selection , 1973, J. Comput. Syst. Sci..

[9]  Paul Milgrom,et al.  Putting Auction Theory to Work , 2004 .

[10]  Theodore Groves,et al.  Incentives in Teams , 1973 .

[11]  Hal R. Varian,et al.  Economic Mechanism Design for Computerized Agents , 1995, USENIX Workshop on Electronic Commerce.

[12]  Makoto Yokoo,et al.  A Limitation of the Generalized Vickrey Auction in Electronic Commerce: Robustness against False-name Bids , 1999, AAAI/IAAI.

[13]  Andrew B. Whinston,et al.  Shill-Proof Fee Schedule: The Sunscreen against Seller Self-Collusion in Online English Auctions , 2004 .

[14]  Makoto Yokoo,et al.  The effect of false-name bids in combinatorial auctions: new fraud in internet auctions , 2004, Games Econ. Behav..

[15]  Dieter Nautz.  Optimal bidding in multi-unit auctions with many bidders , 1995 .

[16]  M. Armstrong.  Optimal Multi-Object Auctions , 2000 .

[17]  Makoto Yokoo,et al.  Robust Multi-unit Auction Protocol against False-name Bids , 2001, IJCAI.

[18]  Georgia Kosmopoulou,et al.  Auctions with shill bidding , 2004 .

[19]  Makoto Yokoo,et al.  Robust double auction protocol against false-name bids , 2001, Proceedings 21st International Conference on Distributed Computing Systems.

[20]  Andrew B. Whinston,et al.  Designing Mechanisms for E-Commerce Security: An Example from Sealed-Bid Auctions , 2001, Int. J. Electron. Commer..

[21]  Lawrence M. Ausubel.  An Efficient Ascending-Bid Auction for Multiple Objects , 2004 .