Represent a feasible allocation by a label for each item saying which bidder receives it. Every such label vector gives disjoint bundles covering all items, so the following heuristic optimization methods can search without violating allocation feasibility.
In local search, begin with any feasible partition and repeatedly make an improving move, such as transferring one item between bidders or exchanging two items. For a transfer , evaluate the change
Stop when no allowed move improves the objective. Several starting partitions can avoid dependence on one local optimum, but no guarantee of a global optimum follows for general bids.
In simulated annealing, use the same feasible neighborhood but also accept a worsening move of loss with probability at temperature . Begin with a relatively high temperature, gradually cool, and retain the best allocation seen. Worsening moves can cross a barrier between local optima; a practical finite cooling schedule does not guarantee optimality.
In tabu search, retain a short memory of recent transfers or exchanges and temporarily prohibit their reversal. Select the best admissible move, possibly worsening the objective, to escape a local optimum. Permit an otherwise tabu move if it improves the best solution found, an aspiration rule. For the winner determination problem, bidder/item pairs or recent reverse transfers provide convenient tabu attributes. All three methods preserve the partition, but for arbitrary bids they are heuristics rather than algorithms with a proved constant approximation ratio.
Given bidders' values for item bundles, the winner determination problem maximizes over disjoint allocated bundles. When every item must be assigned, the bundles form a partition. General values permit complements and difficult combinatorial search; monotone submodular set functions permit a greedy half-approximation. Complexity claims must specify whether the values are supplied explicitly or by a value oracle.