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Models for Iterative Multiattribute Procurement Auctions

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Author Info

  • David C. Parkes

    ()
    (Division of Engineering and Applied Sciences, Harvard University, 229 Maxwell-Dworkin, 33 Oxford Street, Cambridge, Massachusetts 02138)

  • Jayant Kalagnanam

    ()
    (IBM Research Division, T. J. Watson Research Center, P.O. Box 218, Yorktown Heights, New York 10598)

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    Abstract

    Multiattribute auctions extend traditional auction settings to allow negotiation over nonprice attributes such as weight, color, and terms of delivery, in addition to price and promise to improve market efficiency in markets with configurable goods. This paper provides an iterative auction design for an important special case of the multiattribute allocation problem with special (preferential independent) additive structure on the buyer value and seller costs. Auction Additive&Discrete provides a refined design for a price-based auction in which the price feedback decomposes to an additive part with a price for each attribute and an aggregate part that appears as a price discount for each supplier. In addition, this design also has excellent information revelation properties that are validated through computational experiments. The auction terminates with an outcome of a modified Vickrey-Clarke-Groves mechanism. This paper also develops Auction NonLinear&Discrete for the more general nonlinear case---a particularly simple design that solves the general multiattribute allocation problem, but requires that the auctioneer maintains prices on bundles of attribute levels.

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    File URL: http://dx.doi.org/10.1287/mnsc.1040.0340
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 51 (2005)
    Issue (Month): 3 (March)
    Pages: 435-451

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    Handle: RePEc:inm:ormnsc:v:51:y:2005:i:3:p:435-451

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    Related research

    Keywords: multiattribute negotiation; iterative auctions; price-based feedback; Vickrey-Clarke-Groves mechanism; ex post Nash equilibrium; straightforward bidding; procurement;

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    Cited by:
    1. Wang, Hong, 2013. "Contingent payment auction mechanism in multidimensional procurement auctions," European Journal of Operational Research, Elsevier, vol. 224(2), pages 404-413.
    2. repec:wyi:wpaper:002025 is not listed on IDEAS
    3. Papakonstantinou, A. & Bogetoft, P., 2013. "Crowd-sourcing with uncertain quality - an auction approach," MPRA Paper 46055, University Library of Munich, Germany.
    4. Benjamin Blau & Clemens Dinther & Tobias Conte & Yongchun Xu & Christof Weinhardt, 2009. "How to Coordinate Value Generation in Service Networks," Business & Information Systems Engineering, Springer, vol. 1(5), pages 343-356, October.
    5. Papakonstantinou, A. & Bogetoft, P., 2012. "Multi-dimensional auctions under information asymmetry for costs and qualities," MPRA Paper 43563, University Library of Munich, Germany.
    6. repec:wyi:journl:002158 is not listed on IDEAS
    7. repec:fee:wpaper:0901 is not listed on IDEAS
    8. Shachat, Jason, 2009. "Procuring Commodities: Request for Quote or Reverse Auctions?," MPRA Paper 13418, University Library of Munich, Germany.
    9. Jason Shachat & Lijia Wei, 2012. "Procuring Commodities: First-Price Sealed-Bid or English Auctions?," Marketing Science, INFORMS, vol. 31(2), pages 317-333, March.
    10. Jain, Vipul & Panchal, Gajanan B. & Kumar, Sameer, 2014. "Universal supplier selection via multi-dimensional auction mechanisms for two-way competition in oligopoly market of supply chain," Omega, Elsevier, vol. 47(C), pages 127-137.

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