Auctions-the big winner among trading mechanisms for the Internet Economy

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Abstract

Auctions are probably the most important mechanism for dynamic pricing in electronic commerce. Although they constitute a very old mechanism as well, the new popularity has raisen a lot of questions on the appropriate design of an auction mechanism for a particular situation. This chapter describes reasons for auction popularity by setting them into the context of trends in electronic commerce. We then illustrate the main issues in auction design. Our analysis starts with simple single-item auctions, as we can see them in many b2c markets. We then look at the more complex auction designs, which are necessary for b2b markets. For the latter design has to take into account that buyers want to purchase collections of items and services, and that the valuation for winning collections is not simply equal to the sum of valuations of single items. We show how multi-item auction mechanisms can benefit from a synthesis of microeconomic and mathematical optimization models.keywordscombinatorial auctionprice auctiononline auctionauction mechanismhigh valuationthese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
Original languageEnglish
Title of host publicationLectures in E-Commerce
EditorsM Bichler, H Werthner
Place of PublicationBerlin/Heidelberg
PublisherSpringer Verlag
Pages134-148
DOIs
Publication statusPublished - 1 Jan 2001

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