Combinatorial Auctions in Procurement 1

Making the “right” pricing decision in sales or procurement is a complex task. While the types of pricing policies/methods used in the exchange of goods and services vary greatly, we can divide these mechanisms under two broad categories: posted price mechanisms and price discovery mechanisms. Under a posted price mechanism, a good is sold at a take-it-or-leave-it price determined by the seller. A posted price can be dynamic, i.e., the seller may offer different prices to different customers (customized prices) or change prices dynamically over time (intertemporal prices). In a price discovery mechanism, prices are determined via a bidding process.