Economic metaphors for solving intrafirm allocation problems: What does a market buy us? [An article from: Decision Support Systems]

This digital document is a journal article from Decision Support Systems, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
The primary advantage of using simulated internal markets to solve complex resource allocation problems is that markets permit much of the computation of a solution to be distributed over a large number independent agents running on separate processors. The difficulty that arises in the context of NP-hard resource allocation problems is that the market for resources inevitably takes the form of a combinatorial auction, which induces a different type of NP-hard problem. We examine an important class of stochastic, intrafirm resource allocation problems and ask whether economic constructs, such as agents, markets, and prices, provide a useful foundation for structuring decentralized heuristic solution techniques. We show how complex exchange protocols can help market-based search techniques avoid the local maxima problems associated with other greedy search heuristics and converge on good equilibrium solutions.