Technical Report 2000-012

Market-based Approaches to Optimization

Maria Karlsson and Fredrik Ygge

May 2000


The use of markets has been proposed to a number of resource allocation/optimization problems, as such approaches often have a number of conceptual advantages. However, most examples found in the literature are rather ad hoc.

In this article we present a general definition of what constitutes a market-oriented approach to optimization. We demonstrate how this general framework can be used to conceptually improve two well-known approaches from the literature, and discuss computational properties of the different approaches. We also present some general theory and show that the theory of the two approaches under investigation is special cases of this theory.

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