Dynamic combinatorial auctions

University Of Illinois At Urbana-Champaign, Urbana IL

Investigators

Abstract

The main goal of the project is to design and analyze distributed allocation strategies, which enable agents to effectively share resources through an interactive process. Applications include government auctions of assets such as licenses for wireless bandwidth, spot auctions of wireless bandwidth, online auctions, or online sharing of resources in a smart grid. The approach is to bridge the significant gap between theory and application in combinatorial auctions, using methods of decision and control systems. In addition, the PI shall formulate a theoretical basis for prediction markets. The proposed research is grouped into four areas. (1) Bridging the theory-practice gap in combinatorial auctions. (2) Auctions with profit sharing. (3) Auctions with dynamics? (4) A theoretical basis for prediction markets. Intellectual Merit: The project will bring together and develop tools from disparate areas of recent research, including those from the theory of auctions and mechanism design from microeconomics, competitive analysis of online algorithms, deterministic and stochastic optimization methods, and both local and global stability analysis. Broader Impact: The work could have broad applications in many social and economic settings. For example, the methods could potentially be used for such diverse applications as government wireless spectrum auctions, the assignment of tasks to individuals in a large organization, assignment of search and rescue resources to emergency response teams in a disaster recovery mission, or assignment of assets such as vehicles or generators in a comprehensive smart grid system. Engineering applications would include the reservation of transmission bandwidth in wireless networks, or reservation of a divisible scientific experimental facility such as a nuclear accelerator or scientific test bed. Commercial applications would include use for online Internet auctions of resources over time, gate access at airport terminals, pollution permits, and load sharing in cloud computing. In addition, the project integrates research and education of graduate and undergraduate students through the close interaction and mentoring of students, and course development, by the principal investigator.