Universität Karlsruhe (TH) Market Engineering. Christof Weinhardt. May 19 th 2004 Banff, Canada

Transcription

1 Market Engineering Christof Weinhardt May 19 th 2004 Banff, Canada

2 Market Engineering Leo Baekeland sold the rights to his invention, Velox photographic printing paper, to Eastman Kodak in It was the first commercially successful photographic paper and he sold it to Eastman Kodak for $1 million. Baekeland had... Market Design matters! planned to ask $50,000 and to go down to $25,000 if necessary, but... (cf. McAfee 1998) fortunately for him, Eastman spoke first. (Asimov, 1982)

3 The Market Engineering perspective (ii) environment (V.Smith 1996) regulation outcome outcome operator instantiates the framework conduct conduct conduct / expectations determine the outcome structure structure structure determines conduct micro structure infra structure business structure elements of the structure transaction transactionobject object goals of all traders / stakeholders (Holtmann, Neumann, Weinhardt 2002) item to be traded complex grid of objectives of stakeholders

4 Definition Market Engineering Market Engineering comprises... structured, systematic and theoretically founded procedure of analyzing, designing, introducing and also quality assuring and advancing of electronic platforms as well as their legal framework - regarding simultaneously their micro structure IS infra structure business structure (Weinhardt, Holtmann, Neumann 2003)

5 s Posted Offer Buy It Now-Option Auction

6 Design in Market Engineering: Why is it so hard? Example: sniping in ebay = Phenomenon in electronic Auctions: last minute -Bids Information feedback (IF)? Bisher eingereichte arriving bids Gebote 100% 90% 80% 70% 60% 50% 40% 30% Amazon Amazon ebay Minuten vor minutes Auktionsende before closing (Ockenfels 2002) Microstructure: AMAZON ( soft-end ) IF? Business structure: EURONEXT ( trading fees ) IF? IT-Infrastructure: ESNIPE.COM ( sniping agents ) IF?

7 Design in Market Engineering: Why is it so hard? 4 Complexity involved in Design 4Details Matter 4Size of the Design Space 4 Information Requirements 4 Godlike Knowledge about the Participants 4Uncertainties in a turbulent environment Engineering Markets is a wicked problem...characterized by 4 the requirements can be contradicting, 4 the problem may change over time, and 4 there is uncertainty whether the offered solution is the optimal solution or is even a solution. Rittel and Webber (1973)

8 Market Engineering Process outcome outcome conduct conduct structure structure transaction transaction object object operate / monitor platform introduce / teach platform use evaluate (simulations, experiments, business game analysis...) decide on structure & implementation analyse requirements customer & product identify customers iterative re-design design the product

9 Computer-Aided Market Engineering Intuition for Computer-Support 4 Automation of significant parts of this time-consuming development life cycle: 4 Speeding up the process 4 Guarantee appropriate quality of the process and the result 4 Standardized process Storage of Design Knowledge 4 Simulate Market Process

10 Computer-Aided Market Engineering The CAME Toolset e-fits - Market Design Configurator - Compiler - Market Server Core Additional Tools - Simulation Shell - Experimental Shell Market Server Core Recall that there is uncertainty whether the offered solution is the optimal solution or is even a solution

11 Agent-based Market Simulation Environment (AMASE) Domain Facilitator Agent Management System Agent JADE Simulation Agents Simulation Control Agent Message Transport System e-fit-system E-FIT Market Server Core Configurator Client

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13 First Steps with AMASE Scenario: CDA (continuous double auction) Identical initial endowment Static seller strategies Learning buyer Results on convergence: CDA converges quickly Overshooting is likely Results on efficiency: Ex post efficiency is not always attained

14 Conclusion Wicked Problem alleviated Simulation tool reduces uncertainty on quality Solution quality can be measured along the design process Implicit Criteria Exogenous Criteria Design Space Exploration Gathering information about effects Experimental refining analyze isolated effects Endogenous Criteria

15 IW Market Engineering research vision XPS/CBR Consulting Decision-/ Negotiation Support Systems Trader A outcome outcome conduct conduct structure structure transaction object transaction object Trader B (i.a. Bichler, Kersten, Strecker 2003) CAME Web Service CAME Web Service Market Engineering Workbench CAME (WEB) Suite (AvH und SSHRC) Additional Tools Market Server Core e-fits (Transcoop, Weinhardt, Neumann,2003)

16 Thank you very much! Any Questions? Universität Karlsruhe Englerstrasse 14 D Karlsruhe Germany Tel. +49/ (0) Fax +49/ (0)