Last month Benito Mendoza successfully defended his thesis. His research looks at the problems in establishing a distributed combinatorial auction, without the use of a central auctioneer, where the bidders have an incentive to participate and help find the best bidset.
I believe this work lays the foundation for future distributed resource allocation protocols. That is, currently companies and consumers engage in rather simple one-to-one sequential negotiations with each other: you negotiate with one car dealer, then another, then make a decision. These lead to sub-optimal allocations (translation: there was another solution where everyone in the world is happier than in the solution we ended up at). Now that all business is done on the Internet we can build sophisticated negotiation agents that will arrive at better global solutions by using the distributed resource allocation protocols that we are working on. But first, we must ensure that these protocols do find better solutions and are incentive-compatible and fair, and people want to use them (people are not always rational).
Read his thesis for more details:
- Benito Mendoza Garcia. Economic and Computationally Efficient Algorithms for Bidding in a Distributed Combinatorial Auction.PhD Thesis. University of South Carolina, 2009.
Benito has accepted a position at Exxon doing agent-based modelling.