Approximately Efficient Iterative Mechanisms for Combinatorial Exchanges

Abstract

Combinatorial exchanges are double sided marketplaceswith multiple sellers and multiple buyers trading with thehelp of combinatorial bids. The allocation and other associated problems in such exchanges are known to be among the hardest to solve among all economic mechanisms. In this paper, we develop computationally efficient iterative auction mechanisms for solving combinatorial exchanges. Our mechanisms satisfy Individual rationality (IR) and budget-nonnegativity (BN) properties. We also show that the exchange problem can be reduced to combinatorial auction problem when either the buyers or the sellers are single minded. Our numerical experiments show that our algorithm produces good quality solutions and is computationally efficient.