Automated Negotiation in Many-to-Many Markets for Imperfectly Substitutable Goods

In this paper, we present an agent which is able to negotiate the buying and selling of imperfectly sustitutable goods in a double auction style market. Two goods are said to be imperfectly substitutable if a buyer can use either of them, but prefers one over the other. For example, an electronics manufacturer using a RAM chip can use many suppliers to do this but may be willing to pay a premium for components with a lower failure rate. We give a formal description of a double-auction style market mechanism for trading such goods, and define the (classical) equilibrium in such an environment. We present the IS-ZIP agent, which is a generalisation of the ZIP agent for double auctions of Cli# and Bruten [3]. It is able to participate in our double auction environment to make purchases or sales of imperfectly substitutable goods. We demonstrate that, when trading a single good, it is equivalent to Preist and van Tol's modification of the ZIP agent [11]. We describe experiments where a group of IS-ZIP agents with di#erent valuations trade repeatedly, and demonstrate that they rapidly converge to our predicted equilibrium. We conclude by relating our work to that of others, particulary work dealing with multi-attribute negotiation, and discussing extensions