The Effect of False-name Bids in Combinatorial Auctions: New Fraud in
Makoto Yokoo, Yuko Sakurai, and Shigeo Matsubara
Games and Economic Behavior, to appear
We examine the effect of false-name bids on combinatorial auction
False-name bids are bids submitted by a single bidder
using multiple identifiers such as multiple e-mail addresses.
The obtained results are summarized as follows:
1) The Vickrey-Clarke-Groves (VCG) mechanism,
which is strategy-proof and Pareto efficient when there exists no
false-name bids, is not false-name-proof,
2) There exists no false-name-proof combinatorial auction protocol that
satisfies Pareto efficiency,
3) One sufficient condition where the VCG mechanism
is false-name-proof is identified, i.e.,
the concavity of a surplus function over bidders.