Models for Iterative Multiattribute Procurement Auctions

TLDR

Multiattribute auctions allow negotiation over nonprice attributes such as weight, color, and delivery terms in addition to price, aiming to improve market efficiency for configurable goods. The paper proposes an iterative auction design for a special case of the multiattribute allocation problem with preferentially independent additive buyer value and seller costs. The authors introduce two auction designs: Auction Additive&Discrete, a price‑based iterative auction with attribute‑specific prices and supplier discounts that terminates as a modified Vickrey‑Clarke‑Groves mechanism, and Auction NonLinear&Discrete, a simpler design for the general nonlinear case that requires maintaining bundle‑level prices. Computational experiments confirm that the proposed designs exhibit excellent information‑revelation properties.

Abstract

Multiattribute auctions extend traditional auction settings to allow negotiation over nonprice attributes such as weight, color, and terms of delivery, in addition to price and promise to improve market efficiency in markets with configurable goods. This paper provides an iterative auction design for an important special case of the multiattribute allocation problem with special (preferential independent) additive structure on the buyer value and seller costs. Auction Additive&Discrete provides a refined design for a price-based auction in which the price feedback decomposes to an additive part with a price for each attribute and an aggregate part that appears as a price discount for each supplier. In addition, this design also has excellent information revelation properties that are validated through computational experiments. The auction terminates with an outcome of a modified Vickrey-Clarke-Groves mechanism. This paper also develops Auction NonLinear&Discrete for the more general nonlinear case—a particularly simple design that solves the general multiattribute allocation problem, but requires that the auctioneer maintains prices on bundles of attribute levels.