Multiple-issue auction and market algorithms for the world wide web

The Internet is quickly changing the way business-to-consumer and business-tobusiness commerce is conducted in the world. The Electronic Revolution has also spawned a trend of price wars and, in some instances, chaos because of the zero-sum nature of the electronic channel. The technology has created an opportunity to get beyond the lose-lose nature of single issue price wars by determining sellers’ and buyers’ preferences across multiple issues and encouraging negotiations, thereby creating possible joint gains for all parties. We develop simple multiple issue algorithms and heuristics that could be used in electronic auctions and electronic markets, to match businesses to businesses and consumers based on dovetailing underlying interests and preferences. We provide arguments that such dovetailed matches should help stabilize markets and make them more efficient.