Combinatorial Auctions: A Survey

TLDR

Combinatorial auctions sell diverse assets such as airport slots, delivery routes, and network routes, where bidders value bundles rather than individual items due to complementarities and substitution effects, making bundle bidding more efficient. The paper surveys the current state of knowledge on combinatorial auction design and offers new insights. The authors conduct a literature review and plan periodic updates on the journal’s online supplements.

Abstract

Many auctions involve the sale of a variety of distinct assets. Examples are airport time slots, delivery routes, network routing, and furniture. Because of complementarities or substitution effects between the different assets, bidders have preferences not just for particular items but for sets of items. For this reason, economic efficiency is enhanced if bidders are allowed to bid on bundles or combinations of different assets. This paper surveys the state of knowledge about the design of combinatorial auctions and presents some new insights. Periodic updates of portions of this survey will be posted to this journal's Online Supplements web page at http://joc.pubs.informs.org/OnlineSupplements.html