On the Economic Efficiency of the Combinatorial Clock Auction
Nicolas Bousquet, Yang Cai, Christoph Hunkenschr\"oder, Adrian Vetta

TL;DR
This paper demonstrates that the combinatorial clock auction (CCA) guarantees strong social welfare outcomes under specific conditions, with proven bounds on efficiency and revenue, even without assumptions on bidders' valuation functions.
Contribution
It provides the first theoretical welfare guarantees for CCA, showing polylogarithmic approximation bounds based on auction parameters and bidder demand constraints.
Findings
CCA guarantees a welfare approximation within a polylogarithmic factor.
Either the revenue or the welfare of CCA is within a certain fraction of the optimal.
Welfare ratio bounds depend on bidder demand and auction parameters, with proven lower bounds.
Abstract
Since the 1990s spectrum auctions have been implemented world-wide. This has provided for a practical examination of an assortment of auction mechanisms and, amongst these, two simultaneous ascending price auctions have proved to be extremely successful. These are the simultaneous multiround ascending auction (SMRA) and the combinatorial clock auction (CCA). It has long been known that, for certain classes of valuation functions, the SMRA provides good theoretical guarantees on social welfare. However, no such guarantees were known for the CCA. In this paper, we show that CCA does provide strong guarantees on social welfare provided the price increment and stopping rule are well-chosen. This is very surprising in that the choice of price increment has been used primarily to adjust auction duration and the stopping rule has attracted little attention. The main result is a…
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Taxonomy
TopicsAuction Theory and Applications · Consumer Market Behavior and Pricing · Game Theory and Voting Systems
