Research on quantity discount in sequential combinatorial auctions with stochastically equivalent complementary objects

WANG Xian-jia, YANG Sen, ZHANG Liu-bo

Systems Engineering - Theory & Practice ›› 2014, Vol. 34 ›› Issue (5) : 1196-1201.

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Systems Engineering - Theory & Practice ›› 2014, Vol. 34 ›› Issue (5) : 1196-1201. DOI: 10.12011/1000-6788(2014)5-1196

Research on quantity discount in sequential combinatorial auctions with stochastically equivalent complementary objects

  • WANG Xian-jia1, YANG Sen2, ZHANG Liu-bo1
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Abstract

Quantity discount is introduced into sequential second-price auctions with two stochastically equivalent complementary objects. We study the impact of quantity discount on the buyers' equilibrium bidding strategies and expected surplus, set up the programming problem for the seller to choose the optimal quantity discount in order to maximize her ex ante expected revenue. Our analysis shows that: adopting quantity discount induces intense competition among the bidders, adequate quantity discount can increase the seller's ex ante expected revenue and optimal quantity discount decreases as the number of bidders increases.

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sequential auctions / quantity discount / mechanism design / bi-level programming

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WANG Xian-jia , YANG Sen , ZHANG Liu-bo. Research on quantity discount in sequential combinatorial auctions with stochastically equivalent complementary objects. Systems Engineering - Theory & Practice, 2014, 34(5): 1196-1201 https://doi.org/10.12011/1000-6788(2014)5-1196

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