On the computational power of iterative auctions

We embark on a systematic analysis of the power and limitations of iterative combinatorial auctions. Most existing iterative combinatorial auctions are based on repeatedly suggesting prices for bundles of items, and querying the bidders for their "demand" under these prices. We prove a large number of results showing the boundaries of what can be achieved by auctions of this kind. We first focus on auctions that use a polynomial number of demand queries, and then we analyze the power of different kinds of ascending-price auctions.