Multi-Attribute Vickrey Auctions when Utility Functions are Unknown

Multi-attribute auctions allow negotiations over multiple attributes besides price. For example in task allocation, service providers can define their service by means of multiple attributes, such as quality of service, deadlines, or delay penalties. Auction mechanisms assume that the players have evaluation functions over the space of attributes that assign a single value to any combination of attributes. This value (or cost) is directly comparable to price. We argue that in some situations, some of the attributes are difficult to convert to cost, e.g., in transportation it is often important which driver is going to deliver a given truckload. Such personal preferences of a customer are difficult to quantify. To allow negotiations over such non-monetary attributes we relax the requirement of universally comparable utility functions, and give an incentive-compatible auction mechanism that uses only preference orders of the parties and not globally comparable function values. The suggested mechanism assumes that the bidders and the auctioneer have individual total orders over the space of possible contracts, but no utility functions. Each bidder places its bids using its own order, and the winner is chosen by the auctioneer’s order. The actual attribute values are chosen based on the second-best bid. It is shown that this Vickrey intuition yields an incentive-compatible mechanism.