An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools

This article studies a multi-item auction characterized by asymmetric bidders and quantity discounts. We report a practical application of this type of auction in the procurement of Internet services to the 709 public schools of Buenos Aires. The asymmetry in this application is due to firms’ existi...

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Autores principales:	Bonomo, Flavia, Durán, Guillermo A., Jawtuschenko, Alexis Boris
Publicado:	2017
Materias:	Asymmetric bidders Integer linear programming Multi-item auction Quantity discounts
Acceso en línea:	https://bibliotecadigital.exactas.uba.ar/collection/paper/document/paper_02545330_v258_n2_p569_Bonomo http://hdl.handle.net/20.500.12110/paper_02545330_v258_n2_p569_Bonomo
Aporte de:	Biblioteca Digital - Facultad de Ciencias Exactas y Naturales (UBA) de Universidad de Buenos Aires

id	paper:paper_02545330_v258_n2_p569_Bonomo
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spelling	paper:paper_02545330_v258_n2_p569_Bonomo2023-06-08T15:22:01Z An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools Bonomo, Flavia Durán, Guillermo A. Jawtuschenko, Alexis Boris Asymmetric bidders Integer linear programming Multi-item auction Quantity discounts This article studies a multi-item auction characterized by asymmetric bidders and quantity discounts. We report a practical application of this type of auction in the procurement of Internet services to the 709 public schools of Buenos Aires. The asymmetry in this application is due to firms’ existing technology infrastructures, which affect their ability to provide the service in certain areas of the city. A single round first-price sealed-bid auction, it required each participating firm to bid a supply curve specifying a price on predetermined graduated quantity intervals and to identify the individual schools it would supply. The maximal intersections of the sets of schools each participant has bid on define regions we call competition units. A single unit price must be quoted for all schools supplied within the same quantity interval, so that firms cannot bid a high price where competition is weak and a lower one where it is strong. Quantity discounts are allowed so that the bids can reflect returns-to-scale of the suppliers and the auctioneer may benefit of awarding bundles of units instead of separate units. The winner determination problem in this auction poses a challenge to the auctioneer. We present an exponential formulation and a polynomial formulation for this problem, both based on integer linear programming. The polynomial formulation proves to find the optimal set of bids in a matter of seconds. Results of the real-world implementation are reported. © 2016, Springer Science+Business Media New York. Fil:Bonomo, F. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales; Argentina. Fil:Durán, G. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales; Argentina. Fil:Jawtuschenko, A. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales; Argentina. 2017 https://bibliotecadigital.exactas.uba.ar/collection/paper/document/paper_02545330_v258_n2_p569_Bonomo http://hdl.handle.net/20.500.12110/paper_02545330_v258_n2_p569_Bonomo
institution	Universidad de Buenos Aires
institution_str	I-28
repository_str	R-134
collection	Biblioteca Digital - Facultad de Ciencias Exactas y Naturales (UBA)
topic	Asymmetric bidders Integer linear programming Multi-item auction Quantity discounts
spellingShingle	Asymmetric bidders Integer linear programming Multi-item auction Quantity discounts Bonomo, Flavia Durán, Guillermo A. Jawtuschenko, Alexis Boris An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools
topic_facet	Asymmetric bidders Integer linear programming Multi-item auction Quantity discounts
description	This article studies a multi-item auction characterized by asymmetric bidders and quantity discounts. We report a practical application of this type of auction in the procurement of Internet services to the 709 public schools of Buenos Aires. The asymmetry in this application is due to firms’ existing technology infrastructures, which affect their ability to provide the service in certain areas of the city. A single round first-price sealed-bid auction, it required each participating firm to bid a supply curve specifying a price on predetermined graduated quantity intervals and to identify the individual schools it would supply. The maximal intersections of the sets of schools each participant has bid on define regions we call competition units. A single unit price must be quoted for all schools supplied within the same quantity interval, so that firms cannot bid a high price where competition is weak and a lower one where it is strong. Quantity discounts are allowed so that the bids can reflect returns-to-scale of the suppliers and the auctioneer may benefit of awarding bundles of units instead of separate units. The winner determination problem in this auction poses a challenge to the auctioneer. We present an exponential formulation and a polynomial formulation for this problem, both based on integer linear programming. The polynomial formulation proves to find the optimal set of bids in a matter of seconds. Results of the real-world implementation are reported. © 2016, Springer Science+Business Media New York.
author	Bonomo, Flavia Durán, Guillermo A. Jawtuschenko, Alexis Boris
author_facet	Bonomo, Flavia Durán, Guillermo A. Jawtuschenko, Alexis Boris
author_sort	Bonomo, Flavia
title	An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools
title_short	An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools
title_full	An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools
title_fullStr	An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools
title_full_unstemmed	An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools
title_sort	asymmetric multi-item auction with quantity discounts applied to internet service procurement in buenos aires public schools
publishDate	2017
url	https://bibliotecadigital.exactas.uba.ar/collection/paper/document/paper_02545330_v258_n2_p569_Bonomo http://hdl.handle.net/20.500.12110/paper_02545330_v258_n2_p569_Bonomo
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An asymmetric multi-item auction with quantity discounts applied to Internet service procurement in Buenos Aires public schools

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