Skip to main content

Mechanism for Robust Procurements

  • Conference paper
  • 568 Accesses

Part of the Lecture Notes in Computer Science book series (LNAI,volume 7455)

Abstract

We model robust procurement as an optimization problem. We show that its decision version is NP-complete, and propose a backtracking algorithm with cuts that reduce the search-space to find the optimal solution. We then develop a mechanism that motivates agents to truthfully report their private information (i.e., truthful in dominant strategies), maximizes the social welfare (efficient), and ensures non-negative utilities of the participating agents even after execution (post-execution individually rational). In the experiments, we compare our mechanism with an iterated greedy first-price mechanism that represents the current practice in public procurements, in terms of the expected social welfare and the expected payments of the auctioneer. The results show that in terms of social welfare, our mechanism outperforms the greedy approach in all cases except when there exist cheap and reliable agents who can finish the job in time. In terms of payments, our mechanism outperforms the current practice when there are many potential contractors and the optimization constraints are tight.

Keywords

  • Social Welfare
  • Public Procurement
  • Greedy Approach
  • Greedy Method
  • Robust Procurement

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (Canada)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (Canada)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   49.99
Price excludes VAT (Canada)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Commission Regulation (EC) No 1177/2009, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:314:0064:0065:EN:PDF

  2. PeopleSoft manufacturing scorecard, http://www.oracle.com/us/products/applications/peoplesoft-enterprise/financial-management/064743.html

  3. Aanbesteding politiewapen moet over (January 23, 2012), www.nos.nl (Dutch), http://nos.nl/artikel/333629-aanbesteding-politiewapen-moet-over.html

  4. Court decision ljn: Bv1636, rechtbank ’s-gravenhage, 408727/kg za 11-1438 (January 24, 2012), http://www.rechtspraak.nl (Dutch)

  5. Vertraging nieuw politiepistool 1 tot 1,5 jaar (January 24, 2012), http://www.volkskrant.nl (Dutch)

  6. Chen, J., Huang, H., Kauffman, R.J.: A public procurement combinatorial auction mechanism with quality assignment. Decis. Support Syst. 51(3), 480–492 (2011)

    CrossRef  Google Scholar 

  7. Federgruen, A., Yang, N.: Optimal supply diversification under general supply risks. Oper. Res. 57(6), 1451–1468 (2009)

    CrossRef  MATH  Google Scholar 

  8. Flyvbjerg, B., Holm, M.K.S., Buhl, S.L.: Underestimating costs in public works projects: Error or lie? Journal of the American Planning Association 68(3), 279–295 (2002)

    CrossRef  Google Scholar 

  9. Mezzetti, C.: Mechanism design with interdependent valuations: Efficiency. Econometrica 72(5), 1617–1626 (2004)

    CrossRef  MathSciNet  MATH  Google Scholar 

  10. Nisan, N., Ronen, A.: Algorithmic mechanism design. Games and Economic Behavior 35, 166–196 (2001)

    CrossRef  MathSciNet  MATH  Google Scholar 

  11. Porter, R., Ronen, A., Shoham, Y., Tennenholtz, M.: Fault tolerant mechanism design. Artif. Intell. 172(15), 1783–1799 (2008)

    CrossRef  MathSciNet  MATH  Google Scholar 

  12. Ramchurn, S.D., Huynh, D., Jennings, N.R.: Trust in multi-agent systems. Knowl. Eng. Rev. 19(1), 1–25 (2004)

    CrossRef  Google Scholar 

  13. Stein, S., Gerding, E.H., Rogers, A., Larson, K., Jennings, N.R.: Algorithms and mechanisms for procuring services with uncertain durations using redundancy. Artif. Intell. 175(14-15), 2021–2060 (2011)

    CrossRef  MathSciNet  MATH  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2012 Springer-Verlag Berlin Heidelberg

About this paper

Cite this paper

Zhang, Y., Verwer, S. (2012). Mechanism for Robust Procurements. In: Rahwan, I., Wobcke, W., Sen, S., Sugawara, T. (eds) PRIMA 2012: Principles and Practice of Multi-Agent Systems. PRIMA 2012. Lecture Notes in Computer Science(), vol 7455. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-32729-2_6

Download citation

  • DOI: https://doi.org/10.1007/978-3-642-32729-2_6

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-32728-5

  • Online ISBN: 978-3-642-32729-2

  • eBook Packages: Computer ScienceComputer Science (R0)