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Competitive Bundle Trading

Authors Yossi Azar , Niv Buchbinder , Roie Levin , Or Vardi

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Subject Classification

ACM Subject Classification
  • Theory of computation → Online algorithms
  • Theory of computation → Algorithmic game theory
Keywords
  • Online algorithms
  • competitive analysis
  • algorithmic game theory
  • mechanism design
  • dynamic pricing
  • resource allocation

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Abstract

Allocating a set of resources to an online sequence of customers is a fundamental problem in online algorithms with an extensive history. However, the natural extension where the algorithm is also allowed to purchase inventory from suppliers, who also arrive online, is essentially unexplored. We study this general trading problem under the objective of profit maximization, which is the difference between revenue from sales and cost of purchases. Maximizing the difference between two competing quantities is significantly more challenging than the sell-only case.
We show a logarithmic competitive ratio relative to the optimal offline solution. Our algorithm is an exponential-weight–update dynamic pricing scheme, and our analysis dual-fits the algorithm’s profit with respect to a linear programming relaxation that upper bounds the optimal offline profit; we also prove (nearly) matching lower bounds. Finally, we extend our results by designing an incentive-compatible mechanism for the setting in which customers are strategic and may misreport their true valuations.

Cite As Get BibTex

Yossi Azar, Niv Buchbinder, Roie Levin, and Or Vardi. Competitive Bundle Trading. In 53rd International Colloquium on Automata, Languages, and Programming (ICALP 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 374, pp. 17:1-17:25, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026) https://doi.org/10.4230/LIPIcs.ICALP.2026.17

Author Details

Yossi Azar
  • Department of Computer Science, Tel Aviv University, Israel
Niv Buchbinder
  • Department of Statistics and Operations Research, Tel Aviv University, Israel
Roie Levin
  • Department of Computer Science, Rutgers University, Piscataway, NJ, USA
Or Vardi
  • Department of Computer Science, Tel Aviv University, Israel

Funding

  • Buchbinder, Niv: Supported by ISF grant 3001/24 and BSF grant 2022418.

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