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Optimal auctions for multi-unit procurement with volume discount bids

Gautam, Raghav Kumar and Hemachandra, N and Narahari, Y and Prakash, Hastagiri (2007) Optimal auctions for multi-unit procurement with volume discount bids. In: 9th IEEE International Conference on E-Commerce Technology/4th IEEE International Conference on Enterprise Computing, E-Commerce and E-Services, UL 23-26, 2007, Tokyo.

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Abstract

Our attention, is focused on designing an optimal procurement mechanism which a buyer can use for procuring multiple units of a homogeneous item based on bids submitted by autonomous, rational, and intelligent suppliers. We design elegant optimal procurement mechanisms for two different situations. In the first situation, each supplier specifies the maximum quantity that can be supplied together with a per unit price. For this situation, we design an optimal mechanism S-OPT (Optimal with Simple bids). In the more generalized case, each supplier specifies discounts based on the volume of supply. In this case, we design an optimal mechanism VD-OPT (Optimal with Volume Discount, bids). The VD-OPT mechanism uses the S-OPT mechanism as a building block. The proposed mechanisms minimize the cost to the buyer, satisfying at the same time, (a) Bayesian, incentive compatibility and (b) interim individual rationality.

Item Type: Conference Paper
Additional Information: Copyright 2007 IEEE. Personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to servers or lists, or to reuse any copyrighted component of this work in other works must be obtained from the IEEE.
Department/Centre: Division of Electrical Sciences > Computer Science & Automation (Formerly, School of Automation)
Date Deposited: 10 Jun 2010 06:53
Last Modified: 20 Oct 2011 05:38
URI: http://eprints.iisc.ernet.in/id/eprint/26849

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