Combinatorial auctions for exchanging resources over a grid network

Abstract

In grid systems, users compete for different types of resources such that they may execute their applications. Traditional grid systems are formed of organisations that join together for the purpose of collaborative projects. Resources of each of the participating organisation are pooled such that members of individual organisations may access the shared infrastructure. In general, each participant is both a provider and a consumer of resources. Whilst such systems address large organisations, in this paper we address democratic grid systems to satisfy needs of small organisations and even individuals, where on-demand grids may be formed by drawing idling resources available on the Internet. Whilst traditional grid systems resort to allocations that satisfy system specific objectives such as maximization of the resource utilisation, market mechanisms try to obtain allocations that are efficient economically. Economic mechanisms permit to achieve equilibrium between supply and demand and furthermore provide incentives for providers. Combinatorial auction has been argued as an effective mechanism to address the problem of resource allocation within grid systems. Auctions within which multiple types of resources in varying quantities may be traded eliminate the exposure problem by addressing co-allocation. In this paper, we describe a combinatorial exchange where multiple providers and multiple consumers may participate. We describe the winner determination problem that incorporates the time dimension, i.e. resource bundles may be requested for different time ranges, and describe a set of heuristics that have been designed to be fast. We show that these achieve a high level of efficiency as compared to exact solutions. The second part focusses on the pricing problem. The objective is to compute prices that represent the state of the market and bring trustworthy feedback to participants. Drawing on the approach taken by Kwasnica et al. (Manage Sci 51(3):419–434, 2005), we propose a pricing model that computes per-item pricing. Per-item pricing allows users to deduce the price of bundles that they require by linear summation. Furthermore, we propose a model that computes prices as a function of time, thus permitting users, in particular consumers to adjust their demand trading off price and time of execution.