Combinatorial auction design
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Updated: Sep 20, 2026

Methods for Presenting Real-world Objects Under Controlled Laboratory Conditions
Published on: June 21, 2019
David Porter1, Stephen Rassenti, Anil Roopnarine
1Interdisciplinary Center for Economic Science, George Mason University, Fairfax, VA 22030, USA. dporter4@gmu.edu
Abstract:
Combinatorial auctions allow for more expressive bidding in which participants can submit package bids with logical constraints that limit allowable outcomes. This type of auction can be useful when participants' values are complementary or when participants have production and financial constraints. However, combinatorial auctions are currently rare in practice. The main problems confronted in implementing these auctions are that they have computational uncertainty (i.e., there is no guarantee that the winning bids for such an auction can be found in a "reasonable" amount of time when the number of bidders and items becomes larger) and that the auction is cognitively complex and can lead participants to pursue perverse bidding strategies. This article describes a type of combinatorial auction that, during laboratory testing, eliminated these problems and produced extremely efficient outcomes.
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