Introduction to the Special Issue on Electronic Markets

Abstract

C are investing billions of dollars in changing the way they buy and sell goods, integrate their supply chains, and interact with their partners and employees. These “electronic markets” are emerging in every sphere of economic activity. The OR/MS community has a lot to offer in terms of understanding the fundamentals of these electronic markets, which involve setting up the right market structures and mechanisms, understanding the fundamentals of buyer-seller behavior in network mediated markets, and the economic modeling of online markets. This special issue contains a spectrum of papers that address both the design and implementation of electronic markets on the one hand, and the applicability of online market mechanisms in a variety of settings on the other. Given the close interaction between computational, economic, and behavioral considerations in the design and implementation of electronic markets, the distribution of the subject matter of the contributions to this issue is quite interdisciplinary. The papers bring to bear a wide variety of different OR/MS techniques, including mathematical programming, game theory, and dynamic optimization, to solve very interesting and difficult problems. Further, highlighting the interdisciplinary nature of this field, we note that the authorship of the contributions in this special issue are spread across many disciplines, including economics, computer science, information systems, management science, and operations research; in total, 26 institutions from both academia and industry are represented. The first paper in this special issue provides an extensive survey and summary of the essential literature on electronic markets. In doing so, it positions each of the remaining 14 papers of this special issue within the existing literature, demonstrating the contributions and impact of these articles. The first four papers (following the survey article) examine the impact of different bidding behaviors, including naive bidding, online haggling, emotional bidding, and slow Dutch auctions. The next three papers look at different formats of combinatorial auctions, address some of the design issues, and describe algorithms to solve these -hard combinatorial auctions problems. The next four papers investigate the use of auction and electronic market design for different applications, including those that involve multiple objectives, procurement, and supply contracting. The final three papers examine different competitive and collusive behavior in electronic markets. We thank Professor Hau Lee, the former editor-inchief under whose watch this special issue was commissioned, for giving us this opportunity to edit this special issue, and Professor Wallace Hopp, the current editor-in-chief, for his support in bringing this issue to fruition. This special issue would not have been possible without the hard work of the associate editors (listed below) and the numerous referees who have so generously contributed their time to this special issue and helped the editors handle the overwhelming number of submissions (83!) that they received. The associate editors for this special issue are