  In this paper we propose a mechanism for the allocation of pipeline
capacities, assuming that the participants bidding for capacities do have
subjective evaluation of various network routes. The proposed mechanism is
based on the concept of bidding for route-quantity pairs. Each participant
defines a limited number of routes and places multiple bids, corresponding to
various quantities, on each of these routes. The proposed mechanism assigns a
convex combination of the submitted bids to each participant, thus its called
convex combinatorial auction. The capacity payments in the proposed model are
determined according to the Vickrey-Clarke-Groves principle. We compare the
efficiency of the proposed algorithm with a simplified model of the method
currently used for pipeline capacity allocation in the EU (simultaneous
ascending clock auction of pipeline capacities) via simulation, according to
various measures, such as resulting utility of players, utilization of network
capacities, total income of the auctioneer and fairness.
