# Quantum Auctions

## TL;DR

This paper introduces a quantum auction protocol that uses superpositions and entanglement to preserve bid privacy and prevent bid revealing, applicable to various auction types and involving game-theoretical analysis.

## Contribution

It presents a novel quantum auction protocol leveraging superpositions and entanglement, with analysis of strategic behavior and incentive-driven quantum algorithm design.

## Key findings

- Bid privacy is maintained through quantum measurement.
- The protocol applies to multiple auction formats, including combinatorial auctions.
- Adiabatic search reduces strategic manipulation by bidders.

## Abstract

We present a quantum auction protocol using superpositions to represent bids and distributed search to identify the winner(s). Measuring the final quantum state gives the auction outcome while simultaneously destroying the superposition. Thus non-winning bids are never revealed. Participants can use entanglement to arrange for correlations among their bids, with the assurance that this entanglement is not observable by others. The protocol is useful for information hiding applications, such as partnership bidding with allocative externality or concerns about revealing bidding preferences. The protocol applies to a variety of auction types, e.g., first or second price, and to auctions involving either a single item or arbitrary bundles of items (i.e., combinatorial auctions). We analyze the game-theoretical behavior of the quantum protocol for the simple case of a sealed-bid quantum, and show how a suitably designed adiabatic search reduces the possibilities for bidders to game the auction. This design illustrates how incentive rather that computational constraints affect quantum algorithm choices.