Computer Science Department
School of Computer Science, Carnegie Mellon University


Effectiveness of Preference Elicitation in Combinatorial Auctions

Benoit Hudson, Tuomas Sandholm

March 2002

Keywords: Combinatorial auction, preference elicitation

Combinatorial auctions where agents can bid on bundles of items are desirable be-cause they allow the agents to express complementarity and substitutability between the items. However, expressing one s preferences can require bidding on all bundles. Selective incremental preference elicitation by the auctioneer was recently proposed to address this problem, but the idea was not evaluated. In this paper we show, experimentally and theoretically, that automated elicitation provides a drastic benefit. In all of the elicitation schemes under study, as the number of items for sale increases, the amount of information elicited is a vanishing fraction of the information collected in traditional direct revelation mechanisms where bidders reveal all their valuation information. Most of the elicitation schemes also maintain the benefit as the number of agents increases. We develop more effective elicitation policies for existing query types. We also present a new query type that takes the incremental nature of elicitation to a new level by allowing agents to give approximate answers that are refined only on an as-needed basis. In the process, we present methods for evaluating different types of elicitation policies.

22 pages

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