Considering Expected Utility of Future Bidding Options in Bundle Purchasing with Multiple Auction

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TypeArticle
ConferenceThe Sixth International Conference on Electronic Commerce (ICEC'04), October 25-27, 2004., Delft, The Netherlands
Subjectmultiple auctions; bundle purchasing; decision analysis; expected utility; Markov decision process; dynamic programming
AbstractThis paper presents an algorithm for decision-making in multiple open ascending-price (English) auctions where the buyer needs to procure a complete bundle of complementary products. When making bidding decisions, the utility of each choice is determined by considering the buyer's expected utility of future consequential decisions. The problem is modeled as a Markov decision process (MDP), and the value iteration method of dynamic programming is used to determine the value of bidding/not bidding in each state. To ease the computational burden, three state-reducing techniques are employed. When tested against adaptations of two methods from the literature, results show that the algorithm works significantly better when sufficient information on the progress of other concurrently running auctions will be available when future bidding decisions are made.
Publication date
LanguageEnglish
AffiliationNRC Institute for Information Technology; National Research Council Canada
Peer reviewedNo
NRC number47407
NPARC number5763461
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Record identifiera1ea2f6e-a078-44a8-a927-f3019dc52a42
Record created2009-03-29
Record modified2016-05-09
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