Strategies, Performance, and Acceptability in the Dynamic, Competitive Environment of Continuous Combinatorial Auctions

University Of Minnesota-Twin Cities, Minneapolis MN

Investigators

Abstract

Most auctions, particularly for consumer goods, are single-item auctions conducted in discrete time. However, with advances in technology and the spread of the Internet it is now possible, though not common, to employ continuous combinatorial auctions where bidders can repeatedly submit bids on multiple items buddle together, in addition to bidding on the items individually. Such auctions have important potential economic advantages when items are interdependent; however, they are more complex than traditional single-item discrete time auctions. In this proposal, the PIs outline research examining consumer behavior in continuous combinatorial auctions. The research will examine the strategies bidders use in these auctions, how strategy choice is influenced by the complexity of the auction and amount of competition, and how these factors influence auction outcomes. To date, online auctions have primarily used single-item bidding mechanisms. Results from this project will identify what the opportunities for using combinatorial auctions are, particularly in the context of consumer products. Specifically, the project will identify the conditions under which the continuous combinatorial auction is a feasible auction mechanism for general consumer use and how this type of auction should be designed to make the economic efficiecies of this type of mechanism available to the general population (as opposed to only experts in highly specialized settings).