Article

Failures of the VCG mechanism in combinatorial auctions and exchanges

Authors:

Vincent Conitzer,

Tuomas SandholmAuthors Info & Claims

AAMAS '06: Proceedings of the fifth international joint conference on Autonomous agents and multiagent systems

Pages 521 - 528

https://doi.org/10.1145/1160633.1160729

Published: 08 May 2006 Publication History

Abstract

The VCG mechanism is the canonical method for motivating bidders in combinatorial auctions and exchanges to bid truthfully. We study two related problems concerning the VCG mechanism: the problem of revenue guarantees, and that of collusion. The existence of these problems even in one-item settings is well-known; in this paper, we lay out their full extent in multi-item settings. We study four settings: combinatorial forward auctions with free disposal, combinatorial reverse auctions with free disposal, combinatorial forward (or reverse) auctions without free disposal, and combinatorial exchanges. In each setting, we give an example of how additional bidders (colluders) can make the outcome much worse (less revenue or higher cost) under the VCG mechanism (but not under a first price mechanism); derive necessary and sufficient conditions for such an effective collusion to be possible under the VCG mechanism; and (when nontrivial) study the computational complexity of deciding whether these conditions hold.

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Cited By

Singh SPandey AKamal ASwain SGourisaria MBandyopadhyay A(2024)E-commerce Trading using VCG Auction Mechanism in Metaverse2024 2nd World Conference on Communication & Computing (WCONF)10.1109/WCONF61366.2024.10692297(1-5)Online publication date: 12-Jul-2024
https://doi.org/10.1109/WCONF61366.2024.10692297
Pfeiffer CPfeiffer C(2023)Purchasing NegotiationsGame Theory - Successful Negotiation in Purchasing10.1007/978-3-658-40868-8_4(71-111)Online publication date: 19-Apr-2023
https://doi.org/10.1007/978-3-658-40868-8_4
Wagner JMeir R(2023)Strategy-Proof Budgeting via a VCG-Like MechanismAlgorithmic Game Theory10.1007/978-3-031-43254-5_23(401-418)Online publication date: 4-Sep-2023
https://doi.org/10.1007/978-3-031-43254-5_23
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Index Terms

Failures of the VCG mechanism in combinatorial auctions and exchanges

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cover image ACM Conferences

AAMAS '06: Proceedings of the fifth international joint conference on Autonomous agents and multiagent systems

May 2006

1631 pages

ISBN:1595933034

DOI:10.1145/1160633

General Chairs:
Hideyuki Nakashima
Future University - Hakodate, Japan
,
Michael Wellman
University of Michigan
,
Program Chairs:
Gerhard Weiss
Technical University Munich, Germany
,
Peter Stone
The University of Texas at Austin

Copyright © 2006 ACM.

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IFMAS: The International Foundation for Multiagent Systems
SIGAI: ACM Special Interest Group on Artificial Intelligence
ATAL: The International Workshop on Agent Theories, Architectures, and Languages

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Association for Computing Machinery

New York, NY, United States

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Published: 08 May 2006

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AAMAS06: AAMAS '06 - 5th International Joint Conference on Autonomous Agents and Multi-agent Systems 2006

May 8 - 12, 2006

Japan, Hakodate

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Cited By

Singh SPandey AKamal ASwain SGourisaria MBandyopadhyay A(2024)E-commerce Trading using VCG Auction Mechanism in Metaverse2024 2nd World Conference on Communication & Computing (WCONF)10.1109/WCONF61366.2024.10692297(1-5)Online publication date: 12-Jul-2024
https://doi.org/10.1109/WCONF61366.2024.10692297
Pfeiffer CPfeiffer C(2023)Purchasing NegotiationsGame Theory - Successful Negotiation in Purchasing10.1007/978-3-658-40868-8_4(71-111)Online publication date: 19-Apr-2023
https://doi.org/10.1007/978-3-658-40868-8_4
Wagner JMeir R(2023)Strategy-Proof Budgeting via a VCG-Like MechanismAlgorithmic Game Theory10.1007/978-3-031-43254-5_23(401-418)Online publication date: 4-Sep-2023
https://doi.org/10.1007/978-3-031-43254-5_23
Leonardos SMonnot BReijsbergen DSkoulakis EPiliouras GBaldimtsi FRoughgarden T(2021)Dynamical analysis of the EIP-1559 Ethereum fee marketProceedings of the 3rd ACM Conference on Advances in Financial Technologies10.1145/3479722.3480993(114-126)Online publication date: 26-Sep-2021
https://dl.acm.org/doi/10.1145/3479722.3480993
Pfeiffer CPfeiffer C(2021)EinkaufsverhandlungenSpieltheorie – Erfolgreich verhandeln im Einkauf10.1007/978-3-658-32686-9_4(79-122)Online publication date: 20-Mar-2021
https://doi.org/10.1007/978-3-658-32686-9_4
Wang PMeng JChen JLiu TZhan YTsai WJin Z(2019)Smart Contract-Based Negotiation for Adaptive QoS-Aware Service CompositionIEEE Transactions on Parallel and Distributed Systems10.1109/TPDS.2018.288574630:6(1403-1420)Online publication date: 1-Jun-2019
https://doi.org/10.1109/TPDS.2018.2885746
Gerstgrasser M(2019)Reverse Auctions are Different from AuctionsInformation Processing Letters10.1016/j.ipl.2019.03.006Online publication date: Mar-2019
https://doi.org/10.1016/j.ipl.2019.03.006
Serafino PVentre CTran-Thanh LZhang JAn BJennings N(2019)Social Cost Guarantees in Smart Route GuidancePRICAI 2019: Trends in Artificial Intelligence10.1007/978-3-030-29911-8_37(482-495)Online publication date: 23-Aug-2019
https://doi.org/10.1007/978-3-030-29911-8_37
Gerstgrasser MAndre EKoenig SDastani MSukthankar G(2018)On the Complexity of Optimal Correlated Auctions and Reverse AuctionsProceedings of the 17th International Conference on Autonomous Agents and MultiAgent Systems10.5555/3237383.3237474(605-613)Online publication date: 9-Jul-2018
https://dl.acm.org/doi/10.5555/3237383.3237474
Nespoli LSalani MMedici V(2018)A rational decentralized generalized Nash equilibrium seeking for energy markets2018 International Conference on Smart Energy Systems and Technologies (SEST)10.1109/SEST.2018.8495809(1-6)Online publication date: Sep-2018
https://doi.org/10.1109/SEST.2018.8495809
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