Online Auctions

The economic literature on online auctions is rapidly growing because of the enormous amount of freely available field data. Moreover, numerous innovations in auction-design features on platforms such as eBay have created excellent research opportunities. In this article, we survey the theoretical, empirical, and experimental research on bidder strategies (including the timing of bids and winner's-curse effects) and seller strategies (including reserve-price policies and the use of buy-now options) in online auctions, as well as some of the literature dealing with online-auction design (including stopping rules and multi-object pricing rules).

An Investigation Report on Auction Mechanism Design

Auctions are markets with strict regulations governing the information available to traders in the market and the possible actions they can take. Since well designed auctions achieve desirable economic outcomes, they have been widely used in solving real-world optimization problems, and in structuring stock or futures exchanges. Auctions also provide a very valuable testing-ground for economic theory, and they play an important role in computer-based control systems. Auction mechanism design aims to manipulate the rules of an auction in order to achieve specific goals. Economists traditionally use mathematical methods, mainly game theory, to analyze auctions and design new auction forms. However, due to the high complexity of auctions, the mathematical models are typically simplified to obtain results, and this makes it difficult to apply results derived from such models to market environments in the real world. As a result, researchers are turning to empirical approaches. This report aims to survey the theoretical and empirical approaches to designing auction mechanisms and trading strategies with more weights on empirical ones, and build the foundation for further research in the field

A multi-agent platform for auction-based allocation of loads in transportation logistics

This paper describes an agent-based platform for the allocation of loads in distributed transportation logistics, developed as a collaboration between CWI, Dutch National Center for Mathematics and Computer Science, Amsterdam and Vos Logistics Organizing, Nijmegen, The Netherlands. The platform follows a real business scenario proposed by Vos, and it involves a set of agents bidding for transportation loads to be distributed from a central depot in the Netherlands to different locations across Germany. The platform supports both human agents (i.e. transportation planners), who can bid through specialized planning and bidding interfaces, as well as automated, software agents. We exemplify how the proposed platform can be used to test both the bidding behaviour of human logistics planners, as well as the performance of automated auction bidding strategies, developed for such settings. The paper first introduces the business problem setting and then describes the architecture and main characteristics of our auction platform. We conclude with a preliminary discussion of our experience from a human bidding experiment, involving Vos planners competing for orders both against each other and against some (simple) automated strategies

E-Business Oriented Optimal Online Auction Design

Online auctions, in the absence of spatial, temporal and geographic constraints, provide an alternative supply chain channel for the distribution of goods and services. This channel differs from the common posted-price mechanism that is typically used in the retail sector. In consumer-oriented markets, buyers can now experience the thrill of ‘winning’ a product, potentially at a bargain, as opposed to the typically more tedious notion of ‘buying’ it. Sellers, on the other hand, have an additional channel to distribute their goods, and the opportunity to liquidate rapidly aging goods at greater than salvage values. The primary facilitator of this phenomenon is the widespread adoption of electronic commerce over an open-source, ubiquitous Internet Protocol (IP) based network. In this paper, we derive an optimal bidding strategy in sequential auctions that incorporates option value assessment. Furthermore, we establish that our optimal bidding strategy is tractable since it is independent of the bidding strategies of other bidders in the current auction and is only dependent on the option value assessmen

Improvements to transmission expansion planning and implementation :treating uncertainty in commercial operation dates and increasing aunction efficiency

Three proposals contributing to the electricity transmission expansion planning and implementation process are presented in this thesis. The first proposal refers to the use of combinatorial and simultaneous descending auctions to treat the exposure problem and increase the efficiency of multi-item transmission auctions. A simulation framework to quantify potential benefits of using these auctions protocols, for transmission companies and grid users, is proposed. The second proposal refers to an expansion planning methodology that explicitly accounts for uncertainties in facility implementation times while determining the capacity additions and their optimal implementation schedule. In the third proposal, principal-agent theoretic concepts are applied to develop a methodology for the optimal design of winner-selection and risksharing mechanisms, with the goal of managing uncertainties in implementation times of transmission facilities, when competitive processes are used to select the agents to which concessions to implement and operate these facilities are awarded. Classical optimization approaches, notably mixed-integer linear programming, are used in the mathematical formulations that underlie the simulation and analyses carried out for all three proposals; and qualitative conclusions aiming at aiding planners and regulators are drawn from the quantitative results of case studies.Esta tese apresenta três contribuições ao planejamento e implantação da expansão da transmissão. Primeiro, propõe-se usar leilões combinatórios e leilões descendentes simultâneos para tratar o problema da exposição em leilões multi-itens de concessões de transmissão, aumentando a eficiência destes leilões, e apresenta-se um arcabouço de simulação para quantificar os benefícios potencias do uso de tais protocolos. Segundo, propõe-se uma metodologia de planejamento da expansão que considera explicitamente incertezas em tempos de implantação de instalações da transmissão ao determinar as adições de capacidade e as datas de início de implantação de ativos. Terceiro, aplica-se conceitos da teoria do agente-principal para propor uma abordagem para otimizar o desenho de mecanismos de seleção do vencedor e de partilha de riscos, de modo a gerir incertezas em tempos de implantação de ativos, no contexto em que mecanismos competitivos são utilizados para selecionar os agentes a que contratos de transmissão implantação são concedidos. Para todas as três propostas, utiliza-se abordagens de otimização clássica, notadamente programação inteira linear mista, para a formulação matemática que subsidia simulações e análises; e retira-se dos resultados numéricos de estudos de casos conclusões qualitativas que subsidiem planejadores e reguladores

06461 Abstracts Collection -- Negotiation and Market Engineering

From 12.11.06 to 17.11.06, the Dagstuhl Seminar 06461 ``Negotiation and Market Engineering\u27\u27 was held in the International Conference and Research Center (IBFI), Schloss Dagstuhl. During the seminar, several participants presented their current research, and ongoing work and open problems were discussed. Abstracts of the presentations given during the seminar as well as abstracts of seminar results and ideas are put together in this paper. The first section describes the seminar topics and goals in general. Links to extended abstracts or full papers are provided, if available