Auction multiattribute

Multi-unit Auctions Multiattribute Auctions Procurement Reverse Auctions Capacity constrained allocation mechanisms Double Auctions and Exchanges... 

Multiattribute auctions [25] extend the traditional auction setting to allow negotiation over price and attributes, with the final characteristics of the item, as well as the price, determined dynamically through agents bids. For example, in a procurement problem, a multiattribute auction can allow different suppliers to compete over both attributes values and price. 

The single-item multiattribute auction, with single-sourcing, has received the most attention in the literature. In the efficient multiattribute auction problem the goal is to find the configuration of the item and seller that maximizes the total payoff across all participants. In the optimal multiattribute auction problem the goal is to find the configuration of the item, and a price, that maximizes the payoff to the buyer across all possible auction mechanisms. We retain the notation introduced in Section 3.2.4. 

Efficient Multiattribute Auctions. In general, there can be no efficient multiattribute auction that does not run at a deficit. This follows from the Myerson-Satterthwaite impossibility result (see Section 2.2) because there is private information on two-sides of the market (for the buyer and for the sellers). In particular, the VCG mechanism runs at a deficit. 

Vulkan Jennings [101] also describe an iterative multiattribute auction design for this problem. However, their auction is not price based and the buyer- but not the seller -must reveal her complete valuation function to the auction. 

Optimal Multiattribute Auctions. Che [25] has proposed optimal multiattribute auctions for the special case of seller cost functions that are defined in terms of a single unknown parameter. Che s auctions are direct-revelation mechanisms, and he considers both first-price and second-price variations. The second-price variation is exactly the one-sided VCG mechanism, and Che is able to derive the optimal scoring function (or reported cost function) that the buyer should state to maximize her payoff in equilibrium. Branco [21] extends the analysis to consider the case of correlated seller cost functions. No optimal multiattribute auction is known for a more general formulation of the problem, for example for the case of preferential-independence. 

Finally, it is interesting to consider the design of double auctions and exchanges in which their are multiple buyers and multiple sellers, present simultaneously in a market. As with multiattribute auctions, the problem that immediately arises is one of the economic impossibility of efficiency with budget-balance (by Myerson-Satterthwaite), again because both the buyers and sellers have private information about their preference structure. 

David C Parkes and Jayant Kalagnanam. Iterative Multiattribute Vickrey Auctions. Submitted for publication, 2003. 

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