Market-based task allocation mechanisms for limited-capacity suppliers

Rajdeep K. Dash, Perukrishnen Vytelingum, Alex Rogers, Esther David, Nicholas R. Jennings

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


This paper reports on the design and comparison of two economically inspired mechanisms for task allocation in environments where sellers have finite production capacities and a cost structure composed of a fixed overhead cost and a constant marginal cost. Such mechanisms are required when a system consists of multiple self-interested stakeholders that each possess private information that is relevant to solving a systemwide problem. Against this background, we first develop a computationally tractable centralized mechanism that finds the set of producers that have the lowest total cost in providing a certain demand (i.e., it is efficient). We achieve this by extending the standard Vickrey-Clarke-Groves mechanism to allow for multiattribute bids and by introducing a novel penalty scheme such that producers are incentivized to truthfully report their capacities and their costs. Furthermore, our extended mechanism is able to handle sellers' uncertainty about their production capacity and ensures that individual agents find it profitable to participate in the mechanism. However, since this first mechanism is centralized, we also develop a complementary decentralized mechanism based around the continuous double auction. Again, because of the characteristics of our domain, we need to extend the standard form of this protocol by introducing a novel clearing rule based around an order book. With this modified protocol, we empirically demonstrate (with simple trading strategies) that the mechanism achieves high efficiency. In particular, despite this simplicity, the traders can still derive a profit from the market which makes our mechanism attractive since these results are a likely lower bound on their expected returns.

Original languageEnglish
Pages (from-to)391-405
Number of pages15
JournalIEEE Transactions on Systems, Man, and Cybernetics Part A:Systems and Humans
Issue number3
StatePublished - May 2007
Externally publishedYes

Bibliographical note

Funding Information:
Manuscript received January 5, 2005; revised December 1, 2005. The work of R. K. Dash was supported by a BAE Systems studentship and ORS scholarship. The works of P. Vytelingum and E. David were supported by the DIF-DTC project (8.6) for Agent-Based Control Systems. The work of A. Rogers was supported by the ARGUS II Defence and Aerospace Research Partnership (DARP) project. This paper was recommended by Associate Editor C. Hsu.


  • Decision theory
  • Distributed decision making
  • Market-based control (MBC)
  • Multiagent systems


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