Customer-individual bundling and auction design in revenue management

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This project focuses on dynamic pricing, more specifically auction designs for multi-product markets. Combinatorial auctions are the most general types of auction mechanisms, as they allow for different types of utility functions including complements and substitutes. In this research project, we want to explore two closely related research questions in combinatorial auctions. First, we want to analyze the impact of side constraints (such as limits on the number of winners) on the efficiency of auction formats and analyze new pricing rules for ascending auctions, which take side constraints into account. Such side constraints are a precondition for most applications in the field, but they have received little attention in the theory. Second, we want to study online environments, where goods are sold periodically, but the exact number of bidders is unknown in each period and sometimes not even distributional information about the valuations of other competitors is available. This environment is different to the independent private values model, which has been the basis for much of the theory, but similar to environments as they are analyzed in the revenue management literature. Online settings might, however, provide a much better description for many new applications in revenue management, where combinatorial auctions are used periodically to buy or sell perishable items. Examples are the sale of TV and Radio ads, many procurement auctions, or the sale of flights to particular destinations. In addition to theory development, we plan to analyze bidder behavior in both settings in the lab and develop respective software tools.