Testing bidding strategies in the clock-proxy auction for selling radio spectrum: A Genetic Algorithm approach

The clock-proxy auction is a combinatorial auction which is specially designed for environments where bidders have complex preference structures (complements and substitute items), as also occurs in the spectrum licenses market. In such an intricate context, it is difficult to find an optimal strategy. Nevertheless, if a particular environment is selected, evolutionary computation techniques can be used to find some bidding patterns. This research focuses on the sale of a portion of the spectrum called ldquodigital dividendrdquo, implementing a realistic model that could fit in most European countries. To this end, a simulator of the auction mechanism is created and a set of candidate bidding strategies are implemented. Subsequently, the developed GA tests the proposed strategies, searching for the behavior that maximizes the average profits for one bidder. Finally, the results are supported by an exhaustive validation test bed.