Auctions, Market Mechanisms and Their Applications. First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers

Research Article

Solving Winner Determination Problems for Auctions with Economies of Scope and Scale

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  • @INPROCEEDINGS{10.1007/978-3-642-03821-1_15,
        author={Martin Bichler and Stefan Schneider and Kemal Guler and Mehmet Sayal},
        title={Solving Winner Determination Problems for Auctions with Economies of Scope and Scale},
        proceedings={Auctions, Market Mechanisms and Their Applications. First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers},
        proceedings_a={AMMA},
        year={2012},
        month={5},
        keywords={volume discount auctions procurement auctions economies of scale economies of scope},
        doi={10.1007/978-3-642-03821-1_15}
    }
    
  • Martin Bichler
    Stefan Schneider
    Kemal Guler
    Mehmet Sayal
    Year: 2012
    Solving Winner Determination Problems for Auctions with Economies of Scope and Scale
    AMMA
    Springer
    DOI: 10.1007/978-3-642-03821-1_15
Martin Bichler1,*, Stefan Schneider1,*, Kemal Guler2,*, Mehmet Sayal2,*
  • 1: Technische Universität München
  • 2: HP Laboratories
*Contact email: bichler@in.tum.de, schneist@in.tum.de, kemal.guler@hp.com, mehmet.sayal@hp.com

Abstract

Economies of scale and scope describe key characteristics of production cost functions that influence allocations and prices on procurement markets. Auction designs for markets with economies of scale are much less well understood than combinatorial auctions, they require new bidding languages, and the supplier selection typically becomes a hard computational problem. We suggest a bidding language for respective markets, and conduct computational experiments to explore the incremental computational burden to determine optimal solutions brought about by the need to express economies of scope for problems of practical size.