Bundling Equilibrium in Combinatorial auctions
<|reference_start|>Bundling Equilibrium in Combinatorial auctions: This paper analyzes individually-rational ex post equilibrium in the VC (Vickrey-Clarke) combinatorial auctions. If $\Sigma$ is a family of bundles of goods, the organizer may restrict the participants by requiring them to submit their bids only for bundles in $\Sigma$. The $\Sigma$-VC combinatorial auctions (multi-good auctions) obtained in this way are known to be individually-rational truth-telling mechanisms. In contrast, this paper deals with non-restricted VC auctions, in which the buyers restrict themselves to bids on bundles in $\Sigma$, because it is rational for them to do so. That is, it may be that when the buyers report their valuation of the bundles in $\Sigma$, they are in an equilibrium. We fully characterize those $\Sigma$ that induce individually rational equilibrium in every VC auction, and we refer to the associated equilibrium as a bundling equilibrium. The number of bundles in $\Sigma$ represents the communication complexity of the equilibrium. A special case of bundling equilibrium is partition-based equilibrium, in which $\Sigma$ is a field, that is, it is generated by a partition. We analyze the tradeoff between communication complexity and economic efficiency of bundling equilibrium, focusing in particular on partition-based equilibrium.<|reference_end|>
@article{holzman2002bundling,
    title={Bundling Equilibrium in Combinatorial auctions},
    author={Ron Holzman, Noa Kfir-Dahav, Dov Monderer, Moshe Tennenholtz},
    journal={arXiv preprint arXiv:cs/0201010},
    year={2002},
    archivePrefix={arXiv},
    eprint={cs/0201010},
    primaryClass={cs.GT}
}