How much to bid on a package in an online multi-unit combinatorial auction

Abstract

In online combinatorial auctions (CAs), the deadness level (DL) of a package serves as an ask price on a fresh bid that can be meaningfully placed on the package. The DL values of packages in single-unit CAs can be readily determined. But multi-unit CAs have significantly different properties, making the package DLs much harder to obtain, and no closed form expression or computational method has been proposed as yet. Here we present for the first time an exact method for determining package DLs in the multi-unit case, assuming an OR bidding language is being used. It allows fast incremental computations of ask prices after each bid, and will help to promote bidder participation in online multi-unit eBay-like CAs in the procurement and sale of commodities.