Dynamic Auction Package Bidding with Proxy Agents
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Solution Overview
Problem
Current computer-implemented auctions lack effective mechanisms for bidders to place bids on dissimilar items, are susceptible to tacit collusion, and require lengthy computations, limiting scalability and efficiency in package bidding and dynamic auctions.
Innovation Solution
The system introduces proxy agents for bidding on behalf of bidders, mandatory proxy bidding to prevent collusion, and bid improvement rules to constrain early-stage bidding, along with constraints that reduce computation time and allow for augmented dynamic package-bidding processes including additional information in bids.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If package bidding is allowed in dynamic auctions, then bidder freedom and allocative efficiency are improved, but computational complexity increases significantly
Solution Approach 1:
The patent segments the complex package bidding problem into multiple rounds of simpler auctions. In each round, bidders submit bids on packages, and the system identifies winning bids and calculates supplements. This breaks down the computationally intensive task of evaluating all possible packages into manageable iterative steps, reducing the computational burden while maintaining bidder freedom to bid on any package composition.
Solution Approach 2:
The patent implements a dynamic auction process where the set of available bids evolves over time. After each round, supplements are calculated and added to the bid set, allowing bidders to respond to new information in subsequent rounds. This dynamic approach allows the system to handle package bidding complexity adaptively, processing bids in stages rather than requiring all computations simultaneously.
2Ease of manufacture
If traditional auction mechanisms are used, then implementation is simpler, but they are susceptible to tacit collusion and demand reduction
Solution Approach 1:
The patent incorporates feedback mechanisms where bidders receive information about supplements calculated from winning bids after each round. This feedback allows bidders to adjust their strategies and bid more aggressively on packages containing items won by others, counteracting demand reduction and tacit collusion by making the interdependence of bids transparent and responsive.
Solution Approach 2:
The patent calculates supplements in advance based on winning bids from each round, before moving to the next round. This preliminary calculation of supplements and their addition to the bid set proactively addresses potential collusion by establishing a structured framework that rewards aggressive bidding and makes collusive strategies less effective.
3Productivity
If comprehensive package evaluation is performed, then allocative efficiency is improved, but auction duration increases
Solution Approach 1:
The patent structures the auction as a series of periodic rounds rather than a single comprehensive evaluation. In each round, bidders submit bids, winning bids are identified, supplements are calculated, and the process repeats. This periodic structure allows comprehensive package evaluation to occur in manageable intervals, maintaining allocative efficiency while controlling auction duration through iterative refinement rather than exhaustive simultaneous analysis.
Data Source
AI summary
The present invention is a system and method for a computer-implemented auction, based on a system with multiple bidder and auctioneer computers or terminals (20a-n,30) communicating with the server (10) over a network (40). The computers (20a-n) are employed by bidders, the computer (30) is employed by the auctioneer, and the server (10) is the auction computer. That server consist of a CPU (11), memory (12), a data storage device (13), a communication interface (140), a clock (150), an operating system (16), and an auction program (17). In one embodiment, the system architecture is as a client-server system: the auction computer is a server; and the bidder and auctioneer are clients.