nAuctioneer sells a set of
non-homogeneous items
nBidders often have
complex valuations
ncomplementarities
•e.g. V(TV & VCR) > V(TV) + V(VCR)
nsubstitutabilities
•V(TV1 & TV2) < V(TV1) + V(TV2)
nSolution: allow bids on bundles of
goods
nachieves a higher
revenue and social welfare than separate
auctions
nTwo hard problems:
nExpressing
valuations
nDetermining optimal
allocation