An Agent Based Market Design Methodology for Combinatorial Auctions

Auction mechanisms have attracted a great deal of interest and have been used in diverse e-marketplaces. In particular, combinatorial auctions have the potential to play an important role in electronic transactions. Therefore, diverse combinatorial auction market types have been proposed to satisfy market needs. These combinatorial auction types have diverse market characteristics, which require an effective market design approach. This study proposes a comprehensive and systematic market design methodology for combinatorial auctions based on three phases: market architecture design, auction rule design, and winner determination design. A market architecture design is for designing market architecture types by Backward Chain Reasoning. Auction rules design is to design transaction rules for auctions. The specific auction process type is identified by the Backward Chain Reasoning process. Winner determination design is about determining the decision model for selecting optimal bids and auctioneers. Optimization models are identified by Forward Chain Reasoning. Also, we propose an agent based combinatorial auction market design system using Backward and Forward Chain Reasoning. Then we illustrate a design process for the general n-bilateral combinatorial auction market. This study serves as a guideline for practical implementation of combinatorial auction markets design.Combinatorial Auction, Market Design Methodology, Market Architecture Design, Auction Rule Design, Winner Determination Design, Agent-Based System

Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces

This paper studies imperfect price competition between two intermediaries in an electronic business-to-business matching market with indirect network externalities. The intermediaries differ with regard to their ownership structure: an independent third party incumbent marketplace competeswith a challenging collaborative buy-side consortium marketplace in terms of attracting buying and selling firms. When firms can register exclusively with at most one intermediary, the incumbent is only able to deter entry if the number of firms taking ownership in the consortium is sufficiently small. Otherwise, the consortium can successfully enter and monopolize the market. When firms can multi-home, i.e. they register simultaneously with both intermediaries, the consortium can always enter while both intermediaries stay in the market with positive profits.B2B e-commerce, intermediation, network externalities, matching.

Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces

This paper studies imperfect price competition between two intermediaries in an electronic business-to-business matching market with indirect network externalities. The intermediaries differ with regard to their ownership structure: an independent third party incumbent marketplace competes with a challenging collaborative buy-side consortium marketplace in terms of attracting buying and selling firms. When firms can register exclusively with at most one intermediary, the incumbent is only able to deter entry if the number of firms taking ownership in the consortium is sufficiently small. Otherwise, the consortium can successfully enter and monopolize the market. When firms can multihome, i.e. they register simultaneously with both intermediaries, the consortium can always enter while both intermediaries stay in the market with positive profits. --B2B e-commerce,intermediation,network externalities,matching

Real-time Tactical and Strategic Sales Management for Intelligent Agents Guided By Economic Regimes

Many enterprises that participate in dynamic markets need to make product pricing and inventory resource utilization decisions in real-time. We describe a family of statistical models that address these needs by combining characterization of the economic environment with the ability to predict future economic conditions to make tactical (short-term) decisions, such as product pricing, and strategic (long-term) decisions, such as level of finished goods inventories. Our models characterize economic conditions, called economic regimes, in the form of recurrent statistical patterns that have clear qualitative interpretations. We show how these models can be used to predict prices, price trends, and the probability of receiving a customer order at a given price. These “regime†models are developed using statistical analysis of historical data, and are used in real-time to characterize observed market conditions and predict the evolution of market conditions over multiple time scales. We evaluate our models using a testbed derived from the Trading Agent Competition for Supply Chain Management (TAC SCM), a supply chain environment characterized by competitive procurement and sales markets, and dynamic pricing. We show how regime models can be used to inform both short-term pricing decisions and longterm resource allocation decisions. Results show that our method outperforms more traditional shortand long-term predictive modeling approaches.dynamic pricing;trading agent competition;agent-mediated electronic commerce;dynamic markets;economic regimes;enabling technologies;price forecasting;supply-chain

Computer-Supported Negotiations: An Experimental Study of Bargaining in Electronic Commerce

The expanding business-to-business (B2B) e-commerce market has created a need for firms to negotiate business deals online. Negotiation support tools are likely to play a more critical role in B2B e-commerce. Notwithstanding their importance, the impacts of negotiation support tools (especially automated bargaining agents) are not well understood. This research addresses this gap by conducting a series of laboratory experiments to investigate the impact of web-based electronic messaging, web-based negotiation support systems (NSS), and autonomous electronic bargaining agents (EBA) on the outcomes of a multi-issue, e- commerce negotiation. Two types of bargaining situation were investigated: integrative and distributive bargaining. Negotiation outcomes were assessed using joint profit/utility outcome, contract balance, and the closeness to the efficient/Pareto frontier and the Nash bargaining solution. Findings show that web-based NSS can significantly improve efficiency and fairness in remote integrative negotiations but not in distributive negotiations. EBA were found to achieve outcomes comparable to but not significantly better than unassisted human dyads. Implications for NSS and EBA implementation and research were drawn

Software Characteristics of B2B Electronic Intermediaries: A Novel Design Science Approach

Long being seen as commercially unsuccessful after the dot-com era, web-based B2B electronic intermediaries are currentlyundergoing a renaissance driven by globalization and an ever increasing cost-pressure on procurement departments ofenterprises. These systems are getting more sophisticated almost by the day, which is also reflected by numerous relatedscientific articles. This development raises the question of the latest characteristics of such systems scientifically described.In order to answer this question, the work at hand depicts the results of a novel design science approach based on a structuredliterature review. The outcomes of this research are i) a state-of-the-art overview of scientifically described softwarecharacteristics of B2B electronic intermediaries, and ii) a taxonomy for structuring software characteristics of this type ofsystems. The results may help practitioners to further develop B2B electronic intermediaries and e-procurement systems, andwill serve as a basis for future research endeavors in the field

Two-Sided B2B Platforms

This chapter provides a roadmap to the burgeoning literature on two-sided markets with a specific focus on BtoB market places. On-line intermediation involves two-sided network effects between buyers and sellers, and the implications for optimal BtoB platforms’ tariffs are discussed. The chapter discusses first the monopoly case, drawing attention to the distinction between upfront registration and transaction fees. Then the competitive case is discussed, with different degrees of differentiation, the distinction between single-homing and multi-homing, and different business models. The last section is devoted to non-price issues such as tying, the design of the matching process and the ownership structure.

On the Evolution of Market Institutions: The Platform Design Paradox

We study competition among market designers who create new trading platforms, when boundedly rational traders learn to select among them. We ask whether efficient platforms, leading to market - clearing trading outcomes, will dominate the market in the long run. If several market designers are competing, we find that traders learn to select non-market clearing platforms with prices systematically above the market-clearing level, provided at least one such platform is introduced by a market designer. This in turn leads market designers to introduce non-market clearing platforms. Hence platform competition induces non-competitive market outcomes.market institutions, evolution of trading platforms, learning, asymmetric rationality