Machine Learning-powered Iterative Combinatorial Auctions with Interval Bidding
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We study the design of iterative combinatorial auctions for domains with a large number of items. In such domains, preference elicitation is a major challenge because the bundle space grows exponentially in the number of items. To keep preference elicitation manageable, recent work has employed a machine learning (ML) algorithm that identifies a small set of bundles to query from each bidder. However, a major limitation of this prior work is that bidders must submit exact values for the queried bundles, which can be quite costly for them. To address this, we propose a new ML-powered auction with interval bidding (i.e., where bidders submit upper and lower bounds for the queried bundles). To steer the auction towards an efficient allocation, we design a price-based refinement process asking bidders to tighten bounds on relevant bundles only, and we carefully integrate this refinement process into the ML-based query module. Our experiments show that our new auction with interval bidding achieves almost the same allocative efficiency as the prior auction design that required bidders to submit exact values. Despite only eliciting interval bids, our auction beats the well-known combinatorial clock auction in a realistically-sized domain.
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