Revaluation of Bundles by Bidders in Combinatorial Auctions

Current implementations of combinatorial auction mechanisms do not allow bidders to change their valuations of bundles during the course of the auction, forcing them to spend time and money in estimating bundle valuations with accuracy at the very start of the auction. But in the common value model, bidder valuations can change in response to signals from other bidders. Here we propose a multi-round package bidding scheme called RevalBundle which, at the end of each round, provides bidders with information to help them modify and resubmit their valuations. RevalBundle also provides incentives for truthful reporting of valuations by making the final payments of winners independent of their reported valuations. Moreover, the seller's revenue is higher than that realized by the VCG method. Experiments are reported that clarify the features and properties of the mechanism.