MS in Ecommerce Mini-Course 20-853: Electronic Negotiation
The course covers state-of-the-art negotiation technology
for 1-to-many, and many-to-many negotiation.Both game-theoretic and computational issues are discussed.Multi-item, multi-unit, and multi-parameter negotiation are addressed.Expressive bidding languages are analyzed and their implications on
market clearing technology are discussed.Software agents for automated negotiation are studied.
Overall, the goal is to cover classic basics as well as
high-end new technology that has just emerged – both at a very understandable
Level: This is a Master’s level minicourse in the MS
Class times: TuTh ,
Wean Hall 4601.First class: March 16th.Last class: April 29th.
Instructor’s office hour: Tu 3-3:30, Wean Hall 4606.
no book that adequately covers these topics yet.Professor Sandholm is writing a book on this
topic for MIT Press.In the class, we
will use material prepared by the instructor – mainly on slides.Much of this material, together with
additional material, will eventually be published in the book.
by Prof. Sandholm.In addition,
guest lectures by industry experts.
advance of each lecture, each student is expected to download the slides
for that lecture from the course web page, and to print them.
Evaluation: Evaluation is based on class
participation and written homeworks.There will be no significant programming project.
Prerequisites:Applied Data Analysis (46-735), Electronic Payment Systems
(99-763).Others who would like to take
the course need the instructor’s special permission.
Course schedule (subject to change)
March 16: Motivation through an all-pay auction.Course organization.Introduction.Automated negotiation in different
stages of an ecommerce transaction. Utility functions for modeling
preferences.Measures of how good a
negotiation mechanism is.Slides
March 18: Game-theoretic analysis tools.Extensive form and matrix form
representations of games.Notion of
strategy and mixed strategy.Prisoner’s
dilemma and dominant strategy equilibrium.Battle of the Sexes and
bargaining.Threats.When is a threat credible?Subgame perfect equilibrium.Software as a commitment device.Slides
March 30: Auctioning a single item.Private vs. correlated vs. common value
Japanese, Dutch, first-price sealed-bid, and second-price sealed bid
(Vickrey) auction mechanisms.Revenue equivalence.Optional reading: Review article [Wolfstetter 94]Slides
on auctioning a single item.Maximizing welfare vs. maximizing expected revenue.Revenue non-equivalence.Winner’s curse.Theory of proxy bidding.Collusion.Strategic reserve price and
revenue-maximizing auction. Slides
April 6: Rest of auctioning a single item.Auctions where bidders can invest
effort/computation to determine their own valuations.Dynamically vs. statically determined
closing time.Sniping.Mobile proxy bidder agents.Paper on late
April 8: Exchanges (many-to-many markets):
Myerson-Satterthwaite impossibility.Multi-unit auctions.Uniform-price auction.Demand reduction lie.Multi-unit Vickrey auction.Bidding languages (price bids; PQ bids; PQ bids with XORs;
price-quantity graph bids).Computational complexity of clearing auctions, reverse auctions,
and exchanges under the different bidding languages - with
nondiscriminatory and discriminatory pricing.Slides.Homework 1 posted.
April 13: Multi-item auctions. Sequential
auction mechanisms.Budget-constrained bidders in sequential auctions.Parallel auction mechanisms.Combinatorial auctions.Approaches to winner determination in
April 15: Bidding languages.Generalized Vickrey auction.Multi-unit combinatorial auctions.Combinatorial reverse auctions.Combinatorial exchanges.Free disposal vs. no free disposal.Complexity of clearing these
markets.Experiments on clearing
generalized combinatorial markets.Slides.
April 20: Ascending combinatorial auctions.
iBundle.AkBA.Automated bid elicitation in
combinatorial auctions. Slides.Side constraints and non-price
attributes in markets.Complexity
of clearing these markets.Slides.Homework 1 due.Homework 2
April 22: Guest lecture:Kirk Logan, Vice President of Client
Services, CombineNet, Inc.The talk
includes a demo of a procurement optimization system with expressive competition.
April 27: Guest lecture:Reputation systems.By Prof. Paul Resnick, University
April 29: Q & A regarding any topics covered in
the course, and any related topics that students are interested in.Career Q &A. Homework 2 due.
Advanced optional reading
These topics and a host of related topics are covered in
more detail in Professor Sandholm’s PhD-level computer science course
“Foundations of Electronic Marketplaces”.Curious students will find further readings on these topics on the web
page of that course: