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Considering expected utility of future bidding options in bundle purchasing with multiple auctions

Published: 25 March 2004 Publication History

Abstract

This 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.

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  • (2012)A Price Coordination Mechanism for Purchasing Supply Chain Based on Dynamic Game of Incomplete InformationInternational Conference on Transportation Engineering 200710.1061/40932(246)74(449-454)Online publication date: 26-Apr-2012

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cover image ACM Other conferences
ICEC '04: Proceedings of the 6th international conference on Electronic commerce
March 2004
684 pages
ISBN:1581139306
DOI:10.1145/1052220
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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  • ICEC: International Center for Electronic Commerce

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 25 March 2004

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Author Tags

  1. bundle purchasing
  2. decision analysis
  3. dynamic programming
  4. expected utility
  5. markov decision process
  6. multiple auctions

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  • (2012)A Price Coordination Mechanism for Purchasing Supply Chain Based on Dynamic Game of Incomplete InformationInternational Conference on Transportation Engineering 200710.1061/40932(246)74(449-454)Online publication date: 26-Apr-2012

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