2 Simplified Memory Progressive Second Price Auction

Cloud providers are moving towards auctioning cloud resources rather than renting them using fixed prices. Vickrey-ClarkeGroves (VCG) auctions are likely to be used for that purpose, since they maximize social welfare—the participants’ aggregate valuation of the resources. However, VCG auctions are prone to collusion, where users try to increase their profits at the expense of auction efficiency. We propose a coalition formation mechanism for cloud users that helps both users and providers. Our mechanism allows the auction participants to collaborate profitably while also maintaining the auction’s resource allocation efficiency. Our experiments show that when using our mechanism, participants’ mean profit increases by up to 1.67x, without harming the provider’s allocation efficiency.