Exchanges for complex commodities: Representation and indexing of orders

Jenny Hu

Masters Thesis, Computer Science and Engineering Department, University of South Florida, 2002.


The modern economy includes a variety of markets with millions of participants, and the Internet has opened opportunities for the development of new marketplaces. Researchers have extensively studied various auction algorithms, which allow on-line trading of complex goods. They have also developed automated exchange-based markets for standardized commodities, such as stocks and bonds. On the other hand, they have done little work on exchange systems for nonstandard goods.

The purpose of the reported work is to develop an automated exchange for complex nonstandard commodities, such as used cars and collectible stamps. First, we formalize the concept of complex commodities and related trading rules. Second, we propose a distributed exchange architecture, which consists of a central server for matching buyers and sellers, and remote user interfaces. Third, we describe indexing structures for fast identification of matches between buyers and sellers.

The developed system supports complex constraints in the description of commodities and their prices. For example, a car buyer can specify a set of desirable vehicles and their features, and a dependency of the acceptable price on the features. The system also supports constraints on combinations of transactions; it allows a trader to specify mutually exclusive transactions, as well as simultaneous purchase or sale of several commodities.