DSS
Decision Sciences & Systems
Technical University of Munich
 

Market design uses economic theory, mathematical optimization, systems design, experiments, and empirical analysis to design market rules and institutions. Fundamentally, market design asks how the design of the rules and regulations of a market affects the functioning and outcomes of that market. The study includes auction markets, but also markets without money such as matching markets, which found application in the assignment of students to courses or in school choice programs. In 2012 the growing influence and success was recognized in the Nobel Memorial Prize in Economic Sciences.

The design of multi-object auctions is challenging in a number of ways. The winner determination problem is typically a computationally hard problem. Equilibrium bidding strategies are only known for some auction designs, and there is still little understanding of bidder behavior in such markets. The goal of market design research is the development of efficient and robust auction mechanisms for multi-item and multi-unit negotiations.

We are contributing to the game-theoretical literature in this area (ascending multi-object auctions, alternative utility models), design truthful approximation mechanisms for computationally allocation problems, develop optimization models for different bid languages, and analyze bidder behavior in experiments. Results of our work have found application in the design of large scale procurement auctions and tenders. The following provides a list of selected publications in the recent years. The references are organized by the type of analysis (equilibrium analysis, mechanism design, market design, lab experiments, field studies) and by application domain (spectrum auction markets, procurement and logistics, TV ad sales, digital ad exchanges, and course assignment).

Topics

Type of analysis

The following references are sorted by type of analysis. Some articles focus on equilibrium analysis, some with mechanism design, optimization, or lab experiments.

Equilibrium analysis

K. Guler, M. Bichler, and J. Petrakis. Ascending combinatorial auctions with risk averse bidders. INFORMS Group Decision and Negotiation, 25(3):609–639, May 2016. [ link | pdf ]

M. Bichler, K. Guler, and S. Mayer. Split-award procurement auctions: Can Bayesian equilibrium strategies predict human bidding behavior in multi-object auctions? Production and Operations Management, 24(6):1012–1027, June 2015. [ link | pdf ]

M. Bichler, P. Shabalin, and G. Ziegler. Efficiency with linear prices? A theoretical and experimental analysis of the combinatorial clock auction. INFORMS Information Systems Research, 24(2):394–417, 2013. [ link | pdf ]

I. Petrakis, G. Ziegler, and M. Bichler. Ascending combinatorial auctions with allocation constraints: Game-theoretical and computational properties of generic pricing rules. INFORMS Information Systems Research, 24(3):768–786, 2013. [ link | pdf ]

Market design and optimization

S. Albers, M. Bichler, F. Brandt, P. Gritzmann, and R. Kolisch. Algorithmic Economics und Operations Research. Informatik Spektrum, to appear, 2017. [ link ]

M. Bichler, V. Gretschko, and V. Janssen. Bargaining in spectrum auctions: A review of the German auction in 2015. Telecommunications Policy, to appear, 2017. [ link | pdf ]

M. Bichler, Z. Hao, and G. Adomavicius. Coalition-based pricing in ascending combinatorial auctions. INFORMS Information Systems Research, to appear, 2017. [ link | pdf ]

F. Diebold and M. Bichler. Matching with indifferences: A comparison of algorithms in the context of course allocation. European Journal of Operational Research, to appear, 2017. [ link | pdf ]

S. Fadaei and M. Bichler. Truthfulness with value-maximizing bidders: On the limits of approximation in combinatorial markets. European Journal of Operational Research, to appear, 2017. [ link | pdf ]

A. Goetzendorff, M. Bichler, B. Day, and P. Shabalin. Compact bid languages and core-pricing in large multi-object auctions. Management Science, 61(7):1684 – 1703, 2015. [ link | pdf ]

C. Hass, M. Bichler, and K. Guler. Optimization-based decision support for scenario analysis in sourcing markets with economies of scale and scope. Electronic Commerce Research and Applications, 12(3):152–165, 2013. [ link ]

M. Bichler, A. Gupta, and W. Ketter. Designing smart markets. INFORMS Information Systems Research, 21(4):688–699, 2011. [ link ]

M. Bichler, S. Schneider, K. Guler, and M. Sayal. Compact bidding languages and supplier selection for markets with economies of scale and scope. European Journal on Operational Research, 214(1):67–77, 2011. [ link | pdf ]

S. Schneider, P. Shabalin, and M. Bichler. On the robustness of non-linear personalized price combinatorial auctions. European Journal on Operational Research, 206(1):248–259, 2010. [ link | pdf ]

M. Bichler, A. Pikovsky, and T. Setzer. An analysis of design problems in combinatorial procurement auctions. Business & Information Systems Engineering, 51(1), 2009. [ link | pdf ]

M. Bichler, P. Shabalin, and A. Pikovsky. A computational analysis of linear price iterative combinatorial auction formats. INFORMS Information Systems Research, 20(1):33–59, 2009. [ link | pdf ]

M. Bichler and J. Kalagnanam. Configurable offers and winner determination in multi-attribute auctions. European Journal of Operational Research, 160(2):380–394, 2005. [ link | pdf ]

Mechanism design

S. Fadaei and M. Bichler. A truthful mechanism for the generalized assignment problem. ACM Transactions on Economics and Computation, 57(2), 2017. [ link ]

S. Fadaei and M. Bichler. Truthfulness with value-maximizing bidders: On the limits of approximation in combinatorial markets. European Journal of Operational Research, to appear, 2017. [ link | pdf ]

S. Fadaei and M. Bichler. Generalized assignment problem: Truthful mechanism design without money. Operations Research Letters, to appear, 2016. [ link | pdf ]

Economic experiments

M. Bichler, K. Guler, and S. Mayer. Split-award procurement auctions: Can Bayesian equilibrium strategies predict human bidding behavior in multi-object auctions? Production and Operations Management, 24(6):1012–1027, June 2015. [ link | pdf ]

M. Bichler, J. Goeree, S. Mayer, and P. Shabalin. Spectrum auction design: Simple auctions for complex sales. Telecommunications Policy, 38:613–622, 2014. [ link | pdf ]

M. Bichler, P. Shabalin, and J. Wolf. Do core-selecting combinatorial clock auctions always lead to high efficiency? An experimental analysis of spectrum auction designs. Experimental Economics, 16(4):511–545, 2013. [ link | pdf ]

M. Bichler, P. Shabalin, and G. Ziegler. Efficiency with linear prices? A theoretical and experimental analysis of the combinatorial clock auction. INFORMS Information Systems Research, 24(2):394–417, 2013. [ link | pdf ]

T. Scheffel, G. Ziegler, and M. Bichler. On the impact of package selection in combinatorial auctions: An experimental study in the context of spectrum auction design. Experimental Economics, 15(4):667–692, 2012. [ link | pdf ]

T. Scheffel, A. Pikovsky, M. Bichler, and K. Guler. An experimental comparison of linear and non-linear price combinatorial auctions. INFORMS Information Systems Research, 22(2):346–368, 2011. [ link | pdf ]

Field studies and econometrics

S. Albers, M. Bichler, F. Brandt, P. Gritzmann, and R. Kolisch. Algorithmic Economics und Operations Research. Informatik Spektrum, to appear, 2017. [ link ]

M. Bichler, V. Gretschko, and V. Janssen. Bargaining in spectrum auctions: A review of the German auction in 2015. Telecommunications Policy, to appear, 2017. [ link | pdf ]

F. Diebold and M. Bichler. Matching with indifferences: A comparison of algorithms in the context of course allocation. European Journal of Operational Research, to appear, 2017. [ link | pdf ]

M. Bichler and J. Goeree. Frontiers in spectrum auction design. International Journal of Industrial Organization, forthcoming, 2016. [ link ]

C. Kroemer, M. Bichler, and A. Goetzendorff. (Un)expected bidder behavior in spectrum auctions. INFORMS Group Decision and Negotiation, 25(1):31–63, 2016. [ link | pdf ]

F. Diebold, H. Aziz, M. Bichler, F. Matthes, and A. Schneider. Course allocation via stable matching. Business and Information Systems Engineering, 56(2):111–125, 2014. [ link | pdf ]

T. Dierkes, M. Bichler, and R. Krishnan. Estimating the effect of word of mouth on churn and cross-buying in the mobile phone market with markov logic networks. Decision Support Systems, 51(3):361–371, 2011. [ link | pdf ]

M. Bichler. Kombinatorische Online-Verhandlung bei Audi - Wie Aristoteles irrte. Beschaffung aktuell, 9, 2008.

M. Bichler and J. Kalagnanam. A non-parametric estimator for setting reservation prices in procurement auctions. Information Technology and Management, 7(3):157–169, 2006. [ link | pdf ]

Application domain

Markets in different domains have very different requirements. The following references are organized by application domain.

Spectrum auction markets

M. Bichler and J. Goeree. Frontiers in spectrum auction design. International Journal of Industrial Organization, forthcoming, 2016. [ link ]

C. Kroemer, M. Bichler, and A. Goetzendorff. (Un)expected bidder behavior in spectrum auctions. INFORMS Group Decision and Negotiation, 25(1):31–63, 2016. [ link | pdf ]

M. Bichler, J. Goeree, S. Mayer, and P. Shabalin. Spectrum auction design: Simple auctions for complex sales. Telecommunications Policy, 38:613–622, 2014. [ link | pdf ]

M. Bichler, P. Shabalin, and J. Wolf. Do core-selecting combinatorial clock auctions always lead to high efficiency? An experimental analysis of spectrum auction designs. Experimental Economics, 16(4):511–545, 2013. [ link | pdf ]

T. Scheffel, G. Ziegler, and M. Bichler. On the impact of package selection in combinatorial auctions: An experimental study in the context of spectrum auction design. Experimental Economics, 15(4):667–692, 2012. [ link | pdf ]

Procurement and logistics markets

M. Bichler, K. Guler, and S. Mayer. Split-award procurement auctions: Can Bayesian equilibrium strategies predict human bidding behavior in multi-object auctions? Production and Operations Management, 24(6):1012–1027, June 2015. [ link | pdf ]

A. Goetzendorff, M. Bichler, B. Day, and P. Shabalin. Compact bid languages and core-pricing in large multi-object auctions. Management Science, 61(7):1684 – 1703, 2015. [ link | pdf ]

C. Hass, M. Bichler, and K. Guler. Optimization-based decision support for scenario analysis in sourcing markets with economies of scale and scope. Electronic Commerce Research and Applications, 12(3):152–165, 2013. [ link ]

M. Bichler, S. Schneider, K. Guler, and M. Sayal. Compact bidding languages and supplier selection for markets with economies of scale and scope. European Journal on Operational Research, 214(1):67–77, 2011. [ link | pdf ]

M. Bichler, A. Pikovsky, and T. Setzer. An analysis of design problems in combinatorial procurement auctions. Business & Information Systems Engineering, 51(1), 2009. [ link | pdf ]

M. Bichler and R. Steinberg. E-auctions in procurement operations. Production and Operations Management, 2006.

Other markets (TV ad sales, course allocation, etc.)

A. Goetzendorff, M. Bichler, B. Day, and P. Shabalin. Compact bid languages and core-pricing in large multi-object auctions. Management Science, 61(7):1684 – 1703, 2015. [ link | pdf ]

F. Diebold, H. Aziz, M. Bichler, F. Matthes, and A. Schneider. Course allocation via stable matching. Business and Information Systems Engineering, 56(2):111–125, 2014. [ link | pdf ]

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