Knapsack auction

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A knapsack auction is an auction in which several identical items are sold, and there are several bidders with different valuations interested in different amounts of items. The goal is to choose a subset of the bidders with a total demand, at most, the number of items and, subject to that, a maximum total value. Finding this set of bidders requires solving an instance of the knapsack problem, which explains the term "knapsack auction".

An example application of a knapsack auction is auctioning broadcast time among advertisers. Here, the items are the time units (e.g., seconds). Each advertiser has an adversitement of a different length (different number of seconds) and a different value for an advertisement. The goal is to select a subset of advertisements to serve in a time slot of a specific length to maximize the total value.