Article ID: | iaor20083877 |
Country: | Netherlands |
Volume: | 175 |
Issue: | 1 |
Start Page Number: | 90 |
End Page Number: | 100 |
Publication Date: | Nov 2006 |
Journal: | European Journal of Operational Research |
Authors: | Wallenius Jyrki, Wallenius Hannele, Teich Jeffrey E., Zaitsev Alexander |
Keywords: | game theory |
We describe a multi-attribute e-auction mechanism, with a focus on its theoretical foundations. Our mechanism is designed for auctioning multiple units of a good, primarily in B2B transactions. It can be used in various types of forward and reverse auctions/RFQs (Request for Quote), although the emphasis in this paper is on procurement. To incorporate the auction owner's preferences across issues/attributes in an auction/negotiation setting, we adopt a novel application of the ‘pricing out’ technique. Another key feature of our mechanism is the optimization-based ‘suggested price’ decision support component, which momentarily gives the best price acceptable to the buyer.