More expressive market models and the future of combinatorial auctions

Research on auctions and other engineered markets is undergoing a renaissance, spurred by the growth of computing power and communication networks, and the new opportunities for social and economic interaction that they enable. Previous research has been applied to good effect, perhaps most famously by search engines to allocate advertising space in keyword auctions. Other case studies of combinatorial auctions being used in practice can be found in the book of Cramton et al. [Cramton et al. 2006]. Despite these success stories, there is much more to do. In this letter, I will give my opinion as to the ultimate determinants of how successful research on engineered markets can be, with implications for where the community can focus attention to maximize its impact. I will use [Golovin 2007] to illustrate initial progress in the direction I have in mind.