Secure generalized vickrey auction without third-party servers

Abstract

This paper presents a secure Generalized Vickrey Auction (GVA) scheme that does not require third-party servers, i.e., the scheme is executed only by an auctioneer and bidders. Combinatorial auctions, in which multiple goods are sold simultaneously, have recently attracted considerable attention. The GVA can handle combinatorial auctions and has good theoretical characteristics such as incentive compatibility and Pareto efficiency. Secure GVA schemes have been developed to prevent frauds by an auctioneer. However, existing methods require third-party servers to execute the protocol. Having third-party servers that are operated by independent organizations is difficult in practice. Therefore, it is desirable that a protocol be executed by the participants themselves. However, if bidders take part in the execution of the auction procedure, a bidder might have an incentive to be an active adversary so that he manipulates the declarations of other bidders to become a winner or to decrease his payment. In our proposed scheme, we use a new protocol that can achieve the same outcome as the GVA. In this protocol, the procedure executed by a bidder affects neither the prices nor the allocation of the bidder. Therefore, a bidder does not have an incentive to be an active adversary. © IFCA/Springer-Verlag 2004.