Efficient Combinatorial Auction Mechanisms in Electronic Commerce

Abstract

Electronic commerce or e-commerce is the trading of products or services via internet. The product with little demand is generally sold in fixed price. However, when the demand of a product is huge, auction mechanism can be used to maximize the profit. Selling price of some inevitable products like medicine does not depend on the demand. Auction is the best method for selling products which provide maximum possible profit to the sellers and the buyers get the product in reasonable price. Today, a large part of e-commerce uses online auction for selling their products or to provide any service to the worldwide buyers. Winner determination and payment value calculation of combinatorial auction is a very complex task. The solution to this problem demands optimal result to the auctioneer within manageable time and the satisfaction of both the buyers and sellers in terms of profit. Most simple combinatorial auction already used by many websites for e-procurement is fixed price auction. Fixed price auction is not truthful and gives more profit to the seller. In this paper we study different auction mechanisms for item procurement in e-commerce and proposed a new truthful auction strategy that outperforms the existing approaches in the context of time and truthfulness.