On bidding algorithms for a distributed combinatorial auction

Combinatorial auctions (CAs) are a great way to solve complex resource allocation and coordination problems. However, CAs require a central auctioneer who receives the bids and solves the winner determination problem, an NP-hard problem. Unfortunately, a centralized auction is not a good fit for real world situations where the participants have proprietary interests that they wish to remain private or when it is difficult to establish a trusted auctioneer. The work presented here is motivated by the vision of distributed CAs; incentive compatible peer-to-peer mechanisms to solve the allocation problem, where bidders carry out the needed computation. For such a system to exist, both a protocol that distributes the computational task amongst the bidders and strategies for bidding behavior are needed. PAUSE is combinatorial auction mechanism that naturally distributes the computational load amongst the bidders, establishing the protocol or rules the participants must follow. However, it does not provide bidders with bidding strategies. This article revisits and reevaluates a set of bidding algorithms that represent different bidding strategies that bidders can use to engage in a PAUSE auction, presenting a study that analyzes them with respect to the number of goods, bids, and bidders. Results show that PAUSE, along with the aforementioned heuristic bidding algorithms, is a viable method for solving combinatorial allocation problems without a centralized auctioneer.