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MANAGEMENT SCIENCE
Vol. 44, No. 8, August 1998, pp. 1131-1147
DOI: 10.1287/mnsc.44.8.1131
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Computationally Manageable Combinational Auctions

Michael H. Rothkopf, Aleksandar Pekec, Ronald M. Harstad

Faculty of Management and Rutgers Center for Operations Research, Rutgers University, New Brunswick, New Jersey 08903-5062
BRICS, Department of Computer Science, University of Aarhus, Denmark
Faculty of Management and Rutgers Center for Operations Research, Rutgers University, New Brunswick, New Jersey 08903-5062

There is interest in designing simultaneous auctions for situations such as the recent FCC radio spectrum auctions, in which the value of assets to a bidder depends on which other assets he or she wins. In such auctions, bidders may wish to submit bids for combinations of assets. When this is allowed, the problem of determining the revenue maximizing set of nonconflicting bids can be difficult. We analyze this problem, identifying several different structures of permitted combinational bids for which computational tractability is constructively demonstrated and some structures for which computational tractability cannot be guaranteed.

Key Words: Spectrum Auctions; Combinatorial Auctions; Multi-item Simultaneous Auctions; Bidding With Synergies; Computational Complexity



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