On Sealed-Bid Combinatorial Auction with Privacy-Preserving Dynamic Programming

Privacy-preserving combinatorial auctions, also known as sealed-bid combinatorial auctions, allow bidders to place bids on combinations of homogeneous or heterogeneous items without revealing the bidding prices (except for the winning ones) to any individual party. There is a significant lack of literature addressing this crucial and practical issue. We are bridging this gap by introducing two novel protocols for centralized and distributed auction systems. In the centralised approach, we integrate homomorphic encryption and DGK/Veugen secure comparison in a 2-server protocol for sealed-bid auctions. In the distributed approach we introduce a novel protocol based on homomorphic encryption and perturbation to allow an auction issuer and bidders to collaborate without any third party.