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Optimization and Game Theory Models of E-Markets - A Survey

Optimization and Game Theory Models of E-Markets - A Survey. Harri Ehtamo. Systems Analysis Laboratory Helsinki University of Technology www.sal.tkk.fi. What is E-commerce ?. New commercial affairs arising: in the Internet through the use of various

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Optimization and Game Theory Models of E-Markets - A Survey

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  1. Optimization and Game Theory Models of E-Markets - A Survey Harri Ehtamo Systems Analysis Laboratory Helsinki University of Technology www.sal.tkk.fi

  2. What is E-commerce? New commercial affairs arising: in the Internet through the use of various Electronic Shelf Labeling Systems

  3. New technology allows the retailers to collect, process and deliver sales / customer data to plan intelligent pricing strategies to change prices frequently at low cost

  4. Data mining  personalization  customization Amazon.com: online price tests with customers

  5. Pricing strategies Posted price mechanisms: “take-it-or-leave-it” prices Price-discovery mechanisms: prices determined by bidding processes, e.g., auctions

  6. Mechanism design: Optimization and game theory tools for pricing goods Price discrimination; e.g., nonlinear pricing Combinatorial auctions

  7. NP complete CAP: N bidders, M objects

  8. Applications Nonlinear pricing in the design of electricity tariffs (Wilson, Räsänen et. al, in the 1990’s) Dynamic pricing policies in brick-and-mortar stores (in the 2000’s) Combinatorial Auctions (FCC’s Narrow Band Auction 1994, CAs in procurement of logistic services 1993)

  9. Research questions How to exploit the vast resources of online data to improve the shopping process Theoretical work to model descriptively, predictively and normatively some aspects of the process to enable competitional advances

  10. Literature A.M. Geoffrion, R. Krihnan: “Special issue on E-Business and Management Science”, Management Science, Vol. 49, No. 10/11, November 2003 R.B. Wilson: “Nonlinear Pricing”, Oxford University Press, 1993 M. Räsänen, J. Ruusunen, R.P. Hämäläinen: “Optimal tariff design under consumer self-selection”, Energy Economics 19, pp. 151-167, 1997 S. de Vries, R.V. Vohra: “Combinatorial Auctions: A Survey”, INFORMS J. on Computing, Vol. 15, No. 3, pp. 284-309, 2003

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