Exchange market for complex goods: Theory and experiments
Eugene Fink, Josh Johnson, and Jenny Hu
Netnomics,
6(1), pages 21-42, 2004.
Abstract
The modern economy includes a variety of markets, and the Internet has
opened opportunities for efficient on-line trading. Researchers have developed
algorithms for various auctions, which have become a popular means of on-line
sales. They have also designed algorithms for exchange markets, which support
fast-paced trading of standardized goods. On the other hand, they have
done little work on exchanges for complex nonstandard goods, such as used
cars.
We propose a formal model for trading complex goods, and present an
exchange system that allows traders to describe desirable purchases and
sales by multiple attributes; for example, a car buyer can specify a model,
options, color, and other properties of a desirable vehicle. Furthermore,
a trader can enter complex constraints on the acceptable items; for instance,
a buyer can specify a set of desirable vehicles and their features. The
system supports markets with up to 300,000 orders, and generates hundreds
of trades per second.