Combinatorial Diffusion Auction Design

TL;DR

This paper introduces a novel framework for combinatorial diffusion auctions that leverages existing single-item diffusion auctions to ensure incentive compatibility, individual rationality, and weak budget balance in complex settings.

Contribution

It proposes a flexible combinatorial diffusion auction framework that extends single-item diffusion auction principles to combinatorial settings, addressing longstanding challenges.

Findings

Framework guarantees incentive compatibility, IR, and WBB.

Compatible with any desirable single-item diffusion auction.

Addresses challenges in combinatorial auction design.

Abstract

Diffusion auction design for combinatorial settings is a long-standing challenge. One difficulty is that we cannot directly extend the solutions for simpler settings to combinatorial settings (like extending the Vickrey auction to VCG in the traditional settings). In this paper, we propose a different approach to leverage the diffusion auctions for single-item settings. We design a combinatorial diffusion auction framework which can use any desirable single-item diffusion auction to produce a combinatorial auction to satisfy incentive compatibility (IC), individual rationality (IR), and weak budget balance (WBB).