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Solving Winner Determination Problems for Auctions with Economies of Scope and Scale
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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
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| 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 , Stefan Schneider19 , Kemal Guler20 and Mehmet Sayal20 
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Technische Universität München, Boltzmannstrasse 3, 85748 Garching, Germany |
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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
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