1. Auctions Resource Bundling and Allocation Charles Snyder

2. Bundles  Programs use multiple resources  Combine resources into one package  CPU, Memory, Disk Space, Bandwidth  EC2 Instances  Users can buy to suit their needs

3. Why Auctions?  No need to determine price  Let the market decide  Bidders divide the pool of resources  Maximizes profit

4. Walrasian Auctions  Bidders determine how much they’re willing to buy at each price  Auctioneer finds lowest price that sells everything  Match supply and demand  Fair distribution of limited resources  Maximize profit  Inconvenient for bidders, complex for auctioneer

5. Simultaneous Clock Auction  Auctioneer sets a price  Bidders say how much they’ll buy at current price  If demand is higher than supply, raise the price  Clock-Proxy Auction  After clock auction, give a proxy the bid strategy  New round with only proxy bidders  Give some market information, but not all

6. Difficulties  Large bidders can overshadow small bidders  Demand reduction  Influence price or other bidders  “Clinching” – sell undisputed bundles  Activity Rules  Can’t bid for more as price increases  Difficult for bundles  Limit Information

7. Resources  L. Ausubel and P. Cramton. “Auctioning many divisible goods.” Journal European Economic Assoc., 2(2-3):480-493, 2004.  L. Ausubel, P. Cramton, and P. Milgrom. “The clock-proxy auction: a practical combinatorial auction design.” Chapter 5, in Combinatorial Auctions, P. Cramton, Y. Shoham, and R. Steinberg, Eds. MIT Press, 2006.