A Framework of Winner Determination Algorithms for Internet Auctions

Abstract

Auctions have become popular in conducting trade negotiations on the Internet. The design of new auction formats and other negotiation protocols has become an important topic for researchers in both industry and academia. Traditional auction mechanisms typically allow price-only negotiations for which the winner determination is a computationally simple task. However, the need for new auction mechanisms that allow complex bids such as bundle bids and multi-attribute bids has been raised in many situations such as corporate procurement. The winner determination in these auctions is a computationally hard problem. The computational complexity has been a significant hurdle for the wide spread use of these advanced auction models. In this paper, we will outline the auction design space and classify winner determination algorithms along multiple dimensions. Then, we will explain the design of an object framework providing a programming interface to different types of winner determination algorithms. This framework enables application programmers to specify buyer preferences, allocation rules and supplier offerings in a declarative manner, and solve the winner determination problems without having to implement the computationally complex algorithms.