A Mechanism for Multi-unit Multi-item Commodity Allocation in Economic Networks

In this work, we introduce a novel resource allocation mechanism that aims to maximise the social welfare of the market in procurement auctions. Specifically, we consider a market setting with multiple units of homogeneous resources. In such settings, buyers submit their resource requests to a limited number of known providers. This limited number of providers might in turn lead to a provider monopoly in the market and a scarcity of the resources. To address this problem, we propose a novel information diffusion-based resource allocation mechanism for resource allocation in procurement auctions. The proposed mechanism focuses on procuring multiple units of homogeneous resources. In this regard, the proposed mechanism incentivises the providers to truthfully diffuse the procurement information to their neighbours. This information diffusion aids the buyers to procure the required amounts of commodities/resources at the minimum possible prices. In addition, the proposed mechanism gives fair chances to the distant providers to fairly participate in the procurement auction. Further, we prove that the proposed mechanism minimises the procurement costs, with no deficits, compared to the Vickrey-Clarke-Groves mechanism. Finally, based on the experiments, we show that the proposed mechanism has comparatively lesser procurement costs.