Combinatorial auctions using rule-based bids

The migration of auctions to the Internet provides a unique opportunity to harness the power of computing to create new auction forms that were previously impossible. We describe a new type of combinatorial auction that accepts rule-based bids. Allowing bids in the form of high-level rules relieves the buyer from the burden of enumerating all possible acceptable bundles. The allocation of goods requires solving a complex combinatorial problem, a task that is completely impractical in a conventional auction setting. We describe simplifying winner determination heuristics developed in this study to make large problems of this nature manageable. (C) 2002 Elsevier Science B.V. All rights reserved.