A roadmap to auction-based negotiation protocols for electronic commerce

Economic mechanisms are used to determine the flow of resources in a supply chain and to achieve an efficient allocation of goods and services in networked economies. In order to choose the "right" allocation mechanism for a certain situation it is important to know about the characteristics of different negotiation situations and the set of available mechanisms suitable in these situations. Over the past few years there has been an enormous interest of researchers in economics, computer science and game theory to develop advanced economic mechanisms for the creation of new types of electronic exchanges. Combinatorial auctions, multi-attribute auctions and multi-stage auctions are some of the approaches to extend the framework of mechanism design theory. In this paper we develop a classification scheme for negotiation situations in electronic commerce based on microeconomic theory. We describe classic mechanism design and auction theory, and classify old and new approaches in this field.