With a foreword by Vernon L. Smith, recipient of the 2002 Nobel Prize in Economics.
The study of combinatorial auctions—auctions in which bidders can bid on combinations of items or "packages"—draws on the disciplines of economics, operations research, and computer science. This landmark collection integrates these three perspectives, offering a state-of-the art survey of developments in combinatorial auction theory and practice by leaders in the field.
Combinatorial auctions (CAs), by allowing bidders to express their preferences more fully, can lead to improved economic efficiency and greater auction revenues. However, challenges arise in both design and implementation. Combinatorial Auctions addresses each of these challenges. After describing and analyzing various CA mechanisms, the book addresses bidding languages and questions of efficiency. Possible strategies for solving the computationally intractable problem of how to compute the objective-maximizing allocation (known as the winner determination problem) are considered, as are questions of how to test alternative algorithms. The book discusses five important applications of CAs: spectrum auctions, airport takeoff and landing slots, procurement of freight transportation services, the London bus routes market, and industrial procurement. This unique collection makes recent work in CAs available to a broad audience of researchers and practitioners. The integration of work from the three disciplines underlying CAs, using a common language throughout, serves to advance the field in theory and practice.
About the Editors
Peter Cramton is Professor of Economics at the University of Maryland.
Yoav Shoham is Professor of Computer Science at Stanford University.
Richard Steinberg is Chair in Operations Research, London School of Economics.
"Combinatorial Auctions is excellent and exceptional in practically all attributes I would care about in this type of work. This includes the breadth and depth of the topics covered and the language employed. Additionally, my praise also extends to minor details, such as the existence of an exhaustive author and subject index, and the quality of its typesetting, especially with regard to the mathematical apparatus used in some of the chapters. For researchers and practitioners, both on the seller side and on the buyer side, who deal with (combinatorial) auctions, this book is a must-read."—Computing Reviews
"Anyone with an interest in auction theory, market design, and more broadly, practical applications of game theory, will find this book extremely valuable both as a reference to the existing work on combinatorial auctions and as a source of topics and ideas for new research."—Journal of Economic Literature
"This book is indispensable for all researchers and practitioners that want to get introduced to the world of combinatorial auctions."—Operations Research Letters
"The study of combinatorial auctions has importance both practical andtheoretical. In combinatorial auctions, our elegant models of resourceallocation confront the true complexity of markets, where potential traderscompete to buy or sell many different but related goods. Combinatorialauctions are the great frontier of auction theory today, and this bookprovides a state-of-the-art survey of this exciting field."
Roger Myerson, University of Chicago, Nobel Prize in Economics 2007
"This important volume addresses many of the crucial issues in modern auction design. Containing insightful contributions from many of the world's leading market designers and auction theorists, it will be an essential reference for scholars and practitioners alike."
Paul Klemperer, Oxford University
"Combinatorial auctions is an important interdisciplinary field combiningissues from economics, game theory, optimization, and computer science. Thebook presents a great collection of state-of-the-art surveys with awell-balanced view integrating all aspects. A very impressiveaccomplishment! It will help us all appreciate the full range of issues,and will be a great reference for years to come."
Eva Tardos, Cornell University
"'Smart' markets, which allow participants to bid for packages of items, arenow an attractive option for sales and procurements in a variety ofsettings. This book provides a comprehensive overview of both theoreticalconsiderations and practical details. It is remarkable for combiningeconomics, game theory, optimization, and computer science in a unifiedperspective. Combinatorial Auctions is a major advance in the theory andpractice of market design."
Robert Wilson, Stanford University