Multi-attribute auction

A multi-attribute auction is a type of auction in which the bids consist of more than one parameter.[1][2] The structural elements of a bid are called designated attributes. If a bid includes only one quality, such as price, it is a single-attribute auction. Generally, in English auctions, the bids are prices, while in Dutch and Japanese auctions, the bids are confirmations. In Brazilian auctions, bids are the numbers of units being traded.

A scoring, or utility function, is essential for multi-attribute auctions, as it calculates a single number from multiple attributes of a bid, making multi-attribute bids comparable.[3]

Multi-attribute auctions allow agents to sell and purchase goods and services, taking into account more attributes than just price (e.g. service time, tolerances, qualities, etc.). There are verifiable attributes, unverifiable attributes, and auctioneer-provided attributes. According to this classification, we present VMA2, a new Vickrey-based reverse multi-attribute auction mechanism, which takes into account the different types of attributes involved in the auction, and allows the auction customization in order to suit the auctioneer needs. On the one hand, the use of auctioneer provided attributes enables the inclusion of different auction concepts, such as social welfare, trust or robustness; on the other hand, the use of verifiable attributes guarantee truthful bidding. The paper exemplifies the behavior of VMA2 describing how an egalitarian allocation can be achieved. The mechanism is then tested in a simulated manufacturing environment and compared with other existing auction allocation methods.[4]

History

The earliest research paper about a multi-attribute auction appeared in a 1994 discussion on construction contracts.[5] In 1997, it was discussed as an auction for long term electricity contracts.[3]

References
  1. Pla, Albert; López, Beatriz; Murillo, Javier; Maudet, Nicolas (August 2014). "Multi-attribute auctions with different types of attributes: Enacting properties in multi-attribute auctions". Expert Systems with Applications. 41 (10): 4829–4843. doi:10.1016/j.eswa.2014.02.023. hdl:10256/9601.
  2. Huang, He; Liu, Liming; Parker, Geoffrey; Tan, Yinliang (Ricky); Xu, Hongyan (26 December 2018). "Multi‐Attribute Procurement Auctions in the Presence of Satisfaction Risk". Production and Operations Management. 28 (5): 1206–1221. doi:10.1111/poms.12979.
  3. Cameron, Lisa J.; Cramton, Peter; Wilson, Robert (December 1997). "Using auctions to divest generation assets". The Electricity Journal. 10 (10): 22–31. doi:10.1016/S1040-6190(97)80317-X. hdl:1903/7076.
  4. Pla, Albert; López, Beatriz; Murillo, Javier; Maudet, Nicolas (1 August 2014). "Multi-attribute auctions with different types of attributes: Enacting properties in multi-attribute auctions". Expert Systems with Applications. 41 (10): 4829–4843. doi:10.1016/j.eswa.2014.02.023.
  5. Huijun, Feng (1994). "The Application of Multi-objective Optimization to Bid Decision". SYSTEMS ENGINEERING --- THEORY & PRACTICE. 1994-12.
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