Technical Report 2003-027

A Tractable Mechanism for Time Dependent Markets

Per Carlsson, Arne Andersson, and Fredrik Ygge

April 2003


Markets with time dependent goods are special cases of multi commodity markets. An application area of high interest is day-ahead power markets. If these are to be opened for consumer side bidders and local production bidders, the number of actors on the market grows dramatically, and new market mechanisms and algorithms are needed. Another interesting application area with many similarities is bandwidth markets.

The design of large flexible markets with time dependent goods is a computational challenge. In this paper we present a computationally tractable mechanism for time dependent markets. By a number of predefined bid types, it offers useful flexibility to the bidders. We present the market mechanism and the corresponding matching algorithm together with some analysis of its behaviour.

Note: Updated October 2004 with new complexity results

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