Exchange Market for Complex Goods: Theory and Experiments

  • Authors:

  • Eugene Fink;Josh Johnson;Jenny Hu

  • Affiliations:

  • Computer Science and Engineering, University of South Florida, Tampa, FL 33620, USA e-mail: eugene@csee.usf.edu;Computer Science and Engineering, University of South Florida, Tampa, FL 33620, USA e-mail: jojohnson@ea.com;Computer Science and Engineering, University of South Florida, Tampa, FL 33620, USA e-mail: jennyyhu@yahoo.com

  • Venue:
  • Netnomics
  • Year:
  • 2004

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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 260,000 orders, and generates hundreds of trades per second.