Combinatorial auctions in the information age: An experimental study

Abstract

In private values settings, the Wickrey-Clarke-Groves (VCG) mechanism leads to efficient auction outcomes, while the theoretical properties of the Simultaneous Ascending (SA) auction are not well understood. This leads us to compare the properties of an SA and a VCG auction in an experimental setting with private values for multiple objects having complementarities. Statistically, we find little to distinguish the two auctions with both auction forms achieving more than 98% efficiency and extracting roughly 95% of the available surplus. Finally, in contrast to experimental results in single object VCG settings, the theoretical prediction of demand revelation in the multiple object VCG auction is largely supported in our experiments.

Citation

Morgan, J. (2002), "Combinatorial auctions in the information age: An experimental study", Baye, M.R. (Ed.) The Economics of the Internet and E-commerce (Advances in Applied Microeconomics, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 191-207. https://doi.org/10.1016/S0278-0984(02)11032-7