The Future of e-Markets: Multidimensional Market Mechanisms

Cover......Page 1
Half-title......Page 3
Title......Page 5
copyright......Page 6
Contents......Page 7
Figures......Page 9
Tables......Page 11
Preface......Page 13
Acknowledgments......Page 15
1 Electronic Commerce and Electronic Marketplaces......Page 17
1.1.1 Markets vs. Hierarchies......Page 18
1.1.2 The Impact of Information Technology......Page 21
1.2 Fixed vs. Dynamic Pricing......Page 23
1.3 Advanced Auction Design for Electronic Markets......Page 26
1.4 The Structure of this Book......Page 28
2.1 The Role of Electronic Brokers......Page 31
2.2 Electronic Brokerage Services on the Internet......Page 33
2.3.1.1 The World Wide Web......Page 36
2.3.1.2 Multi-Tier Software Architectures......Page 37
2.3.2 Distributed Object Infrastructures......Page 38
2.3.2.1 Object Frameworks......Page 39
2.3.2.2 Distributed Object Standards......Page 40
2.3.2.3 Electronic Commerce Frameworks......Page 41
2.4 Services of an Electronic Broker......Page 43
2.4.1.1 The Brokerage Service Provider......Page 45
2.4.2 Architectural Model......Page 46
2.4.2.1 The Yellow Pages Service......Page 47
2.4.2.2 The Catalog Aggregation Service......Page 48
2.4.2.3 The Notification Service......Page 49
2.4.2.4 The Negotiation Service......Page 50
2.5.1 The OFFER Yellow Pages and Catalog Aggregation Service......Page 52
2.5.2 The OFFER Negotiation Service......Page 54
2.6.1 The Interoperability Problem......Page 57
2.6.2 Document-Centric Electronic Commerce Standards......Page 59
3.1 Market Structures......Page 63
3.1.1 The Ideal of a Perfectly Competitive Market......Page 65
3.1.3 Oligopolies and Oligopsonies......Page 67
3.2 Setting Optimal Prices......Page 68
3.2.1 Maximizing Profits in a Monopoly......Page 69
3.2.2 Price and Product Differentiation......Page 70
3.2.4 Group Pricing......Page 72
3.2.5 Versioning......Page 74
3.2.6 Product Bundling......Page 76
3.3 Towards Dynamic Pricing......Page 77
4.1 Equilibrium Theory......Page 79
4.2.1 Static Games with Complete Information......Page 81
4.2.2 Repeated and Sequential Games......Page 84
4.2.3 Games with Incomplete Information......Page 85
4.3.1 Basic Thoughts......Page 86
4.3.2 Considering Incentive Constraints......Page 88
4.3.3 Mechanism Design Guidelines......Page 89
4.4 Experimental Economics......Page 91
4.5.1 Economic Simulations......Page 93
4.5.2 Agent-Based Computational Economics......Page 95
5 Automated Negotiations – A Survey of State-of-the-Art Practices......Page 98
5.1 A Roadmap to Negotiation Situations in Electronic Commerce......Page 99
5.2.1 Game-Theoretical Models of Bargaining......Page 101
5.2.2 Negotiation Analysis and Negotiation Support Systems......Page 104
5.2.3 Automated Agent-Based Bargaining......Page 107
5.3 Multilateral Negotiations......Page 110
5.3.1 Basic Auction Formats......Page 112
5.3.2 The Independent Private Values (IPV) Model......Page 114
5.3.3.1 Removing Bidder’s Risk Neutrality......Page 118
5.3.3.3 Removing Symmetry......Page 119
5.3.3.5 Repeated Auctions......Page 120
5.3.3.6 Bidder Collusion......Page 121
5.3.4 Optimal Auction Design......Page 122
5.3.5 The Common Value Model......Page 124
5.3.6 Double Auctions......Page 125
5.4 A Critical Review of Game-Theoretical Auction Models......Page 126
5.4.2 Information Feedback in Open-Cry Auctions......Page 127
5.4.3 Auctions in an Economic Context......Page 128
5.4.4 Basic Assumptions of Game-Theoretical Models......Page 129
5.5 Experimental Analysis of Standard Auction Mechanisms......Page 130
5.5.1 Tests of the Revenue Equivalence Theorem......Page 131
5.5.2 Analysis of Efficiency, Varying Numbers of Bidders, etc.......Page 132
5.5.3 Tests of Common Value Auctions......Page 133
5.6.1 Multi-Unit Auctions of Homogeneous Goods......Page 134
5.6.2.1 Sequential Auctions......Page 136
5.6.2.3 The Federal Communication Commission’s Spectrum Auctions......Page 137
5.6.2.4 Combinatorial Auctions......Page 138
5.6.2.5 The Generalized Vickrey Auction......Page 140
5.6.2.6 Determination of Winners in Combinatorial Auctions......Page 142
5.6.4 The OptiMark Case......Page 143
5.7.1 Empirical Data......Page 147
5.7.3 Closing Rules and Auction Formats......Page 148
5.7.4 Business Models......Page 150
5.7.6 Minimum Bids and Reserve Prices......Page 151
5.7.7 Multi-Unit Online Auctions......Page 152
5.8 Summary......Page 153
6.1 Multi-Attribute Procurement Negotiations......Page 155
6.2 Description of the Analyzed Mechanisms......Page 156
6.3 Research Questions......Page 160
6.4.1 The Basics of Futures and Options......Page 161
6.4.2 Trading Options......Page 164
6.4.3 Option Pricing Models......Page 166
6.4.4 OTC Trading of Derivatives......Page 169
6.5.1 Overview and Bidding Process......Page 170
6.5.2 Server-Side Implementation......Page 172
6.5.3 Client-Side Implementation......Page 174
6.5.3.1 Buyer Client......Page 175
6.5.3.2 Bidder Client......Page 177
6.6.1 Laboratory Procedures......Page 180
6.6.2 Experimental Design, Subject Pool, and Reward Mechanism......Page 182
6.6.3.1 Comparison of Multi-Attribute and Single-Attribute Auction Formats......Page 184
6.6.3.2 Revenue Equivalence of Multi-Attribute Auction Formats......Page 185
6.6.3.3 Strategic Equivalence between Second-Score and English Auctions......Page 186
6.6.3.4 Efficiency of Multi-Attribute Auctions......Page 187
6.6.4 Discussion of the Results......Page 188
6.6.4.2 Information Feedback and Number of Bidders......Page 189
6.6.4.3 Number of Negotiable Attributes......Page 190
7.1 Previous Game-Theoretical Analysis......Page 191
7.1.1 Independent Cost Model......Page 192
7.1.2 Correlated Cost Model......Page 194
7.2.1 Simulation Languages......Page 195
7.2.2 Description of the Simulation Model......Page 197
7.2.3 Discussion of the Results......Page 199
7.2.4 Simulation of OTC Markets for Derivatives......Page 200
7.3 Multi-Unit Extensions......Page 204
7.3.2 Type B and C......Page 206
7.3.3 Type D......Page 208
7.3.4 Type E and F......Page 210
7.3.5 A Model of Multi-Unit Auctions......Page 211
7.4 Summary......Page 215
8 Conclusions and Perspectives......Page 217
8.1 Applicability and Prerequisites......Page 218
8.2 The Role of Decision Support......Page 220
A1.1 Existence of a Utility Function......Page 222
A1.2 Optimal Choice......Page 226
A1.3 Certainty vs. Uncertainty......Page 228
A2 Multi-Objective Decision Analysis......Page 231
A2.1 General Process......Page 232
A2.2 Multi-Attribute Utility Theory......Page 233
A2.3 SMART......Page 237
A2.4 Analytic Hierarchy Process......Page 238
A2.5 Conjoint Analysis......Page 239
A2.6 Multi-Attribute Utility Models with Interaction......Page 241
A2.8 Summary......Page 243
References......Page 246
Index......Page 262