Integer Programming for Combinatorial Auction Winner Determination

Combinatorial auctions are important as they enable bidders to place bids on combinations of items; compared to other auction mechanisms, they often increase the efficiency of the auction, while keeping risks for bidders low. However, the determination of an optimal winner combination in combinatorial auctions is a complex computational problem. In this paper we (i) compare recent algorithms for winner determination to traditional algorithms, (ii) present and benchmark a mixed integer programming approach to the problem, which enables very general auctions to be treated efficiently by standard integer programming algorithms (and hereby also by commercially available software), and (iii) discuss the impact of the probability distributions chosen for benchmarking.