Designing Electronic Auctions: An Internet-Based Hybrid Procedure Combining Aspects of Negotiations and Auctions

Abstract

We discuss design issues pertaining to multiple issue auctions in the WWW environment. Based on a critical evaluation of existing auctions, we propose NegotiAuctiontm, an algorithmic Internet-based auction procedure, which combines certain elements of negotiations and auctions. It can be used either in reverse or forward auctions. When defining a multiple issue (multiple attribute) auction, the auction owner has more control over the bidding process than is possible in traditional auctions, signaling bid requirements to the bidders individually. This will result in a preferred set of auction winners. It is believed to reduce the total transaction time and eliminate the necessity of holding subsequent negotiations with the set of winners.