A Discrete Particle Swarm Algorithm for Combinatorial Auctions

Although combinatorial auctions make trading goods between buyers and sellers more conveniently, the winner determination problem (WDP) in combinatorial auctions poses a challenge due to computation complexity. In this paper, we consider combinatorial auction problem with transaction costs, supply constraints and non-negative surplus constraints. We formulate the WDP of combinatorial auction problem as an integer programming problem formulation. To deal with computational complexity of the WDP for combinatorial auctions, we propose an algorithm for finding solutions based on discrete PSO (DPSO) approach. The effectiveness of the proposed algorithm is also demonstrated by several numerical examples.