A combinatorial auction among experts and amateurs: The case of single-skilled experts

Takayuki Ito, Makoto Yokoo, Shigeo Matsubara

Research output: Contribution to journalArticlepeer-review


Auctions have recently commanded a great deal of attention in the field of multiagent systems. Correctly judging the quality of auctioned goods is often difficult for amateurs, in particular, on the Internet auctions. We have formalized such a situation so that Nature selects the quality of the auctioned good. Experts can observe Nature's selection (i.e., the quality of the good) correctly, while amateurs, including the auctioneer, cannot. In other words, the information on Nature's selection is asymmetric between experts and amateurs. In this situation, it is difficult to attain an efficient allocation, since experts have a clear advantage over amateurs, and they would not reveal their valuable information without some reward. We have succeeded in developing a single-unit auction protocol in which truth-telling is a dominant strategy for each expert. In this paper, we focus on a combinatorial auction protocol under asymmetric information on Nature's selection. Experts may have an interest in, and expert knowledge on, Nature's selection for several goods, that is, experts are versatile. However, the case of versatile experts is very complicated. Thus, as a first step, we assume experts to have an interest in, and expert knowledge on, a single good. That is, experts are single-skilled. Under these assumptions, we develop an auction protocol in which the dominant strategy for experts is truth-telling. Also, for amateurs, truth-telling is the best response when experts tell the truth. By making experts to elicit their information on the quality of the goods, the protocol can achieve a socially desirable, (i.e., Pareto efficient) allocation, if certain assumptions are satisfied.

Original languageEnglish
Pages (from-to)11-21
Number of pages11
JournalSystems and Computers in Japan
Issue number12
Publication statusPublished - Nov 2005

All Science Journal Classification (ASJC) codes

  • Theoretical Computer Science
  • Information Systems
  • Hardware and Architecture
  • Computational Theory and Mathematics


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