Agent-based simulation of multiple-round timber combinatorial auction

Abstract

This paper presents a simulation-based analysis of a multiple-round timber combinatorial auction in the timber industry. Currently, most timber auctions are single-unit auctions (i.e., each forest stand is sold separately). However, other types of auctions could be applied to take advantage of the various needs of the bidders with respect to species, volumes, and quality. This study aims to analyze the use of combinatorial auction to this specific context using a simulation approach. Various number of auctions per year, periodicity, lot size, and number of bidders are considered as parameters to set up the different market configurations. The outcomes of both combinatorial auction and single-unit auction are compared with respect to different setup configurations. This analysis shows that combinatorial auction can bring more profit for both seller and buyer when the market is less competitive.