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Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering
Auctions, Market Mechanisms and Their Applications
First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers
10.1007/978-3-642-03821-1_15
Sanmay Das, Michael Ostrovsky, David Pennock and Boleslaw Szymanksi
Solving Winner Determination Problems for Auctions with Economies of Scope and Scale

Martin Bichler19 Contact Information, Stefan Schneider19 Contact Information, Kemal Guler20 Contact Information and Mehmet Sayal20 Contact Information

(19)  Technische Universität München, Boltzmannstrasse 3, 85748 Garching, Germany
(20)  HP Laboratories, 1501 Page Mill Rd., Palo Alto, CA 94304, USA
Abstract
Economies of scale and scope describe key characteristics of production cost functions that influence allocations and prices on procurement markets. Auction designs for markets with economies of scale are much less well understood than combinatorial auctions, they require new bidding languages, and the supplier selection typically becomes a hard computational problem. We suggest a bidding language for respective markets, and conduct computational experiments to explore the incremental computational burden to determine optimal solutions brought about by the need to express economies of scope for problems of practical size.

Keywords  volume discount auctions - procurement auctions - economies of scale - economies of scope


Contact Information Martin Bichler
Email: bichler@in.tum.de

Contact Information Stefan Schneider
Email: schneist@in.tum.de

Contact Information Kemal Guler
Email: kemal.guler@hp.com

Contact Information Mehmet Sayal
Email: mehmet.sayal@hp.com
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