iBundle: An Efficient Ascending Price Bundle Auction

Abstract

Standard auction mechanisms often break down in important e-commerce applications, where agents demand bundles of complementary resources, i.e. "I only want B if I also get A". This paper describes iBundle, an ascending-price auction that is guaranteed to compute optimal bundle allocations with agents that follow a best-response bidding strategy. The auction prices bundles directly and allows agents to place additive or exclusive-or bids over collections of bundles. Empirical results confirm that iBundle generates efficient allocations for hard resource allocation problems. Furthermore, we shoe that iBundle generates solutions without complete revelation (or computation) of agent preferences.