Combinatorial auctions for electronic business

Combinatorial auctions (CAs) have recently generated significant interest as an automated mechanism for buying and selling bundles of goods. They are proving to be extremely useful in numerous e-business applications such as e-selling, e-procurement, e-logistics, and B2B exchanges. In this article, we introduce combinatorial auctions and bring out important issues in the design of combinatorial auctions. We also highlight important contributions in current research in this area. This survey emphasizes combinatorial auctions as applied to electronic business situations

Mitigating airport congestion : market mechanisms and airline response models

Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2009.This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.Includes bibliographical references (leaves 157-165).Efficient allocation of scarce resources in networks is an important problem worldwide. In this thesis, we focus on resource allocation problems in a network of congested airports. The increasing demand for access to the world's major commercial airports combined with the limited operational capacity at many of these airports have led to growing air traffic congestion resulting in several billion dollars of delay cost every year. In this thesis, we study two demand-management techniques -- strategic and operational approaches -- to mitigate airport congestion. As a strategic initiative, auctions have been proposed to allocate runway slot capacity. We focus on two elements in the design of such slot auctions -- airline valuations and activity rules. An aspect of airport slot market environments, which we argue must be considered in auction design, is the fact that the participating airlines are budget-constrained. -- The problem of finding the best bundle of slots on which to bid in an iterative combinatorial auction, also called the preference elicitation problem, is a particularly hard problem, even more in the case of airlines in a slot auction. We propose a valuation model, called the Aggregated Integrated Airline Scheduling and Fleet Assignment Model, to help airlines understand the true value of the different bundles of slots in the auction. This model is efficient and was found to be robust to data uncertainty in our experimental simulations.(cont.) -- Activity rules are checks made by the auctioneer at the end of every round to suppress strategic behavior by bidders and to promote consistent, continual preference elicitation. These rules find applications in several real world scenarios including slot auctions. We show that the commonly used activity rules are not applicable for slot auctions as they prevent straightforward behavior by budget-constrained bidders. We propose the notion of a strong activity rule which characterizes straightforward bidding strategies. We then show how a strong activity rule in the context of budget-constrained bidders (and quasilinear bidders) can be expressed as a linear feasibility problem. This work on activity rules also applies to more general iterative combinatorial auctions.We also study operational (real-time) demand-management initiatives that are used when there are sudden drops in capacity at airports due to various uncertainties, such as bad-weather. We propose a system design that integrates the capacity allocation, airline recovery and inter-airline slot exchange procedures, and suggest metrics to evaluate the different approaches to fair allocations.by Pavithra Harsha.Ph.D

Combinatorial auctions for electronic business

Combinatorial auctions (CAs) have recently generated significant interest as an automated mechanism for buying and selling bundles of goods. They are proving to be extremely useful in numerous e-business applications such as e-selling, e-procurement, e-logistics, and B2B exchanges. In this article, we introduce combinatorial auctions and bring out important issues in the design of combinatorial auctions. We also highlight important contributions in current research in this area. This survey emphasizes combinatorial auctions as applied to electronic business situations

Combinatorial exchange models for a user-driven air traffic flow management in Europe

2008/2009Air Traffic Flow Management (ATFM) is the service responsible to guarantee that the available capacity of the air transportation system is efficiently used and never exceeded. It guarantees safety of air transportation by adopting a series of measures which range from strategic long-term ones to the imposition of ground delays to flights at a tactical level. These ATFM delays are imposed to individual flights at the departure airport prior to their take-off, since it is safer and less costly to anticipate on the ground any delay predicted somewhere in the system. They are assigned by a central authority according to a First-Planned-First-Served principle, without taking into account individual Airlines' preferences. This criteria of assignment can cause an aggregated cost of delay experienced by users, higher than the minimal one, due to the fact that the cost of delay is a non-linear function of the duration and it depends on many variables such as the type of aircraft, the specific origin-destination pair, ecc. This thesis tackles the issue of formalizing and analyzing alternative models for the assignment of ATFM resources which take into account individual airlines preferences. In particular mathematical programming models are analyzed, that extend the concept of ATFM slot currently adopted to the one of Target Window, as proposed in the CATS European project. Such a concept is in line with the SESAR program, recently adopted in Europe to develop the new generation system of Air Traffic Management, which imposes a direct involvement of Airspace users whenever external constraints need to be enforced that modify their original requests. The first Chapter provides a general introduction to the context of Air Traffic Management and Air Traffic Control. In the second Chapter the principles, methods and performances of the ATFM system are described according to the current situation as well as to the SESAR target concept. The problem of optimally assign ATFM resources is then described mathematically and then analyzed to uncover two fundamental structures that determine its tractability: one corresponds to the case in which there is a unique capacity constrained resource while in the second there is an unrestricted number of constrained resources. In Chapter three a number of properties are proved that give insight into the applicability of different mechanisms for a central calculation of the optimal solution by the ATFM authority. Since such mechanisms involve cost minimization for several agents they are formulated as exchanges, i.e. particular types of auctions in which each participant may buy and/or sell several indivisible goods. The last part of the thesis included in Chapter four deals with the design of iterative exchange mechanisms, whose application in real world presents several advantages with respect to centralized models, from the distribution of computational complexity among participants to the preservation of disclosure of private information by Aircraft Operators. In this case an optimal model based on the Lagrangian relaxation of the separable central problem is first formulated and analyzed. To overcome practical issues possibly deriving from its application in real operations, an heuristic iterative Market-based mechanism is finally formalized. This algorithm exploits some of the underlying characteristics specific to the problem to derive near-optimal solutions in an acceptable time. Computational results are obtained by simulating its implementation on real traffic data and they show that considerable cost savings are possible with respect to a First-Planned-First-Served central allocation. The contribute of this thesis is twofold. The first is to provide a mathematical description, modeling and analysis of the ATFM resource exchange problem faced by Airspace users when network capacity needs to be rationed among them. The second consists in the methodological innovation represented by the formulation of the Market Mechanism which is compliant with several requirements represented by legislative and practical constraints and whose simulation provided encouraging results.XXII Cicl

Preference Based Fair Allocation of Limitted Resources

The fair division of scarce resources among agents is a challenging issue across a range of applications, especially when there is competition among agents. One application of resource division is in Air Traffic Management (ATM). This dissertation is motivated by the fairness issues that arise in the resource allocation procedures that have been introduced under Collaborative Decision Making (CDM). Fair rationing and allocation of available en-route time slots are two major challenges that we address in this research. The first challenge, fair rationing, is about how to compute a fair share of available resources among agents, when the available resources fall below the total demand. Since the demand, (flights), are time dependent, we introduce a new rationing method that includes the time dependency of demand. The new procedure gives every flight that is disrupted by an AFP a share of available resources. This is in contrast to Ration-By-Schedule (RBS), the allocation method currently in use, where later scheduled flights do not receive any slots. We will discuss and prove the fairness properties of our novel rationing procedure. The second challenge, allocation of en-route resources, is about how to allocate resources among competitive agents, (flight operators), when each agent has different preferences over resources, (time slots). We design four randomized procedures for allocating scarce resources when the airlines' preferences are included. These procedures use an exogenous fair share, which can be computed using the method described above, as a fairness standard for the allocation of slots among airlines. The first two procedures, Preference Based Proportional Random Allocation (PBPRA) and Modified-PBPRA, implicity assume equal weight for each time slot. Compared to RBS, PBPRA and M-PBPRA reduce the total internal cost of airlines and also assign each airline a number of slots close (in expectation) to their fair share. The fairness, efficiency and incentive properties of PBPRA and M-PBPRA are evaluated. The value (or cost of delay) an airline associates with a particular flight may vary substantially from flight to flight. Airlines who wish to receive priority for certain flights usually are willing to pay more for specific time slots. To address the need to express varying priorities, we propose two procedures, Dual Price Proportional Random Allocation (DP-PRA) and Modified-DP-PRA (MDP-PRA) , that assign dual prices to resources, i.e. time slots, in order to capture the airlines' preferences over delays, rerouting and cancelations. We explore the fairness, efficiency and incentive properties of DP-PRA and MDP-PRA

Modèles et algorithmes pour les enchères combinatoires

Thèse numérisée par la Direction des bibliothèques de l'Université de Montréal

On the Provision of Public Goods on Networks: Incentives, Exit Equilibrium, and Applications to Cyber .

Attempts to improve the state of cyber-security have been on the rise over the past years. The importance of incentivizing better security decisions by users in the current landscape is two-fold: it not only helps users protect themselves against attacks, but also provides positive externalities to others interacting with them, as a protected user is less likely to become compromised and be used to propagate attacks against other entities. Therefore, security can be viewed as a public good. This thesis takes a game-theoretic approach to understanding the theoretical underpinnings of users' incentives in the provision of public goods, and in particular, cyber-security. We analyze the strategic interactions of users in the provision of security as a non-excludable public good. We propose the notion of exit equilibrium to describe users' outside options from mechanisms for incentivizing the adoption of better security decisions, and use it to highlight the crucial effect of outside options on the design of incentive mechanisms for improving the state of cyber-security. We further focus on the general problem of public good provision games on networks. We identify necessary and sufficient conditions on the structure of the network for the existence and uniqueness of the Nash equilibrium in these games. We show that previous results in the literature can be recovered as special cases of our result. We provide a graph-theoretical interpretation of users' efforts at the Nash equilibria, Pareto efficient outcomes, and semi-cooperative equilibria of these games, by linking users' effort decisions to their centralities in the interaction network. Using this characterization, we separate the effects of users' dependencies and influences (outgoing and incoming edges, respectively) on their effort levels, and uncover an alternating effect over walks of different length in the network. We also propose the design of inter-temporal incentives in a particular type of security games, namely, security information sharing agreement. We show that either public or private assessments can be used in designing incentives for participants to disclose their information in these agreements. Finally, we present a method for crowdsourcing reputation that can be useful in attaining assessments of users' efforts in security games.PhDElectrical Engineering: SystemsUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/133328/1/naghizad_1.pd