Risk and User Preferences in Winner Determination

Güleser K. Demir, Maria Gini

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

We discuss a solution to the winner determination problem which takes into account not only costs but also risk aversion of the agent that accepts the bids and works for tasks that have time and precedence constraints. We develop an equivalent unit approach to the group of tasks to analyze the system and use Expected Utility Theory as the basic mechanism for decision-making. Our theoretical and experimental analysis shows that Expected Utility is especially useful for choosing between cheap-but-risky and costly-but-safe bids. Moreover, we show how bids with similar costs and similar probabilities of being successfully completed but different time windows can be efficiently selected or rejected.

Original languageEnglish (US)
Title of host publicationProceedings of the ACM Conference on Electronic Commerce
EditorsN. Sadeh
Pages150-157
Number of pages8
Volume5
StatePublished - 2003
EventFifth International Conference on Electric Commerce, ICEC 2003 - Pittsburgh, PA, United States
Duration: Sep 30 2003Oct 3 2003

Other

OtherFifth International Conference on Electric Commerce, ICEC 2003
CountryUnited States
CityPittsburgh, PA
Period9/30/0310/3/03

Keywords

  • Automated auctions
  • Expected utility
  • Multi-agent contracting
  • Risk
  • Winner determination

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