AN APPROXIMATION ALGORITHM FOR MULTI-UNIT AUCTIONS. NUMERICAL AND SUBJECT EXPERIMENTS

• Takahashi, Satoshi

  Graduate School of Informatics and Engineering, The University of Electro-Communications

• Izunaga, Yoichi

  Faculty of Business Sciences, University of Tsukuba

• Watanabe, Naoki

  Graduate School of Business Administration, Keio University

Abstract

In multi-unit auctions for a single item, the Vickrey–Clarke–Groves mechanism (VCG) attains allocative efficiency but suffers from its computational complexity. Takahashi and Shigeno thus proposed a greedy based approximation algorithm (GBA). In a subject experiment there was truly a difference in efficiency rate but no significant difference in seller’s revenue between GBA and VCG. It is not clear in theory whether each bidder will submit his or her true unit valuations in GBA. We show, however, that in a subject experiment there was no significant difference in the number of bids that obey “almost” truth-telling between GBA and VCG. As for individual bidding behavior, GBA and VCG show a sharp contrast when a human bidder competes against machine bidders; underbidding was observed in GBA, while overbidding was observed in VCG. Some results in a numerical experiment are also provided prior to reporting those observations.

Printed DOI on the PDF may be wrong. See the following DOI: https://doi.org/10.5277/ord180106

Journal

• Operations Research and Decisions

  Operations Research and Decisions 28 (1), 95-115, 2018

  Wroclaw University of Science and Technology

Keywords

• multi-unit auction
• approximation algorithm
• experiment

Details

• CRID: 1050298532703756800
• NII Article ID: 120007191815
• ISSN: 20818858
• HANDLE: 2324/4755274
• Text Lang: en
• Article Type: journal article
• Data Source:
  • IRDB
  • CiNii Articles