Professional Documents
Culture Documents
s.t.
y ( S , j ) 1
iS jN
i M
y(S , j ) 1
S M
j N
y ( S , j ) 0,1S M , j N
General CAP Formalization
Let :
N Set of Bidders
M Set of distinct objects
S .S M Bundles of objects
b i ( S ) The bid that agent j N has announced for bundle S .
b( S ) max b i ( S )
jN
1 Bundle S is allocated to j
y(S , j)
0 Otherwise
CAP (Combinatorial Auction problem )
max b j
(S ) y(S , j)
jN S M
s.t.
y ( S , j ) 1
iS jN
i M
y(S , j) 1
S M
j N
y ( S , j ) 0,1S M , j N
Vickrey Clarke Groves (VCG) -
part 1
1. Agent j reports v j
s.t.
y ( S , j ) 1
iS jN
i M
y(S , j) 1
S M
j N
y ( S , j ) 0,1S M , j N
s.t.
y ( S , j ) 1
iS jN \ k
i M
y(S , j) 1
S M
j N \ k
y ( S , j ) 0,1S M , j N \ k
1 Bundle S is allocated to j
y(S , j)
0 Otherwise
CAP (Combinatorial Auction problem )
max b j
(S ) y(S , j)
jN S M
s.t.
y ( S , j ) 1
iS jN
i M
y(S , j) 1
S M
j N
y ( S , j ) 0,1S M , j N
Multiple object in the CAP
Formulation
Let :
N Set of Bidders
M Set of distinct objects
S .S M Bundles of objects
b i ( S ) The bid that agent j N has announced for bundle S .
b( S ) max b i ( S )
jN
1 Bundle S is allocated to j
y(S , j )
0 Otherwise
CAP (Combinatorial Auction problem )
max b
jN S M
j
(S ) y(S , j)
s.t.
y(S , j ) l
iS jN
i M l number of times object i is in the items
y(S , j ) 1
S M
j N
y ( S , j ) 0,1S M , j N
The CAP (Combinatorial Auction
Problem)
• Bidders must submit bid for every subset
• Transmitting the bid sets in a succinct
manner
Restriction of conditions =>
solvable solution - an example
• Restriction
– All bidders complement each other
– all bidders are symmetric
• Solution
– Auction all the items as one item in an optimal
single item auction
Cybernomics experiments
• Performed tests for additive values and
valuations with synergies of small , medium
or high intensity
• Results
– Combinatorial multi round auctions always
superior in efficiency but lower in revenue
– Slower convergence (finishing the auctions)
The CAP - continued
• partial solutions
– Restriction on the way the bids are transmitted
• OR / OR* Trees
• Single mind restriction
– Sending an Oracle
• Problem of deciding the collection of bids
to accept
The SPP Problem
• Given a set of M elements
• collection V of subsets with weights
• Find the largest weight collection of subsets
that are pairwise disjoint.
The SPP Formalization
1 if the j th set in V with weight c j is selected
xj
0 otherwise
1 if the j th set in V contains element i M
aij
0 otherwise
The SPP Pr oblem
max c j x j
jV
s.t.
a
jV
ij x j 1 i M
x j 0,1 j V
SPP Related Problem - Set
Partitioning Problem (SPA)
1 if the j th set in V with weight c j is selected
xj
0 otherwise
1 f the j th set in V contains element i M
aij
0 otherwise
The SPA Pr oblem
max c j x j
jV
s.t.
a
jV
ij x j 1 i M
x j 0,1 j V
SPP Related Problem - Set
Covering Problem
1 if the j th set in V with weight c j is selected
xj
0 otherwise
1 f the j th set in V contains element i M
aij
0 otherwise
The SCP Pr oblem
min c
jV
j xj
s.t.
a
jV
ij x j 1 i M
x j 0,1 j V
What is the complexity of SPP?
• SPP Is a NP-Hard / Complete problem
• SPP Problem is exponential in |V| (V the
number of subsets of M)!
• No Hope??
Effective solution to the CAP
Problems
• Requirements
– Number of distinct bids is not large
– Underlying SPP problem can be solved
reasonable quick.
SPP Approximation
• There is no Polynomial algorithm that can
deliver a worst case ration larger than n^(E-
1) for any E>0
• There is a worst case ratio of O(n/(log n)^2)
algorithm (Polynomial algorithm)
Other Approaches
• Decentralized Methods
– Setting up a fictitious market determining an
allocation and prices
– Choosing an allocation and bidders are required
to send improvements
Conclusions
• Combinatorial Auctions can lead to higher
economic efficiency
• Practical Combinatorial Auctions are hard
to implement with compliance to the truth
revelation principle