When it comes to auctions on the web, users rarely have any kind of control beyond setting the maximum price they’re willing to pay. If, for example, you wanted to buy a power supply on eBay, but only if you won a separate auction for the computer it would work with, you’d have to manually check in on each auction – you couldn’t conditionally say that you only wanted one if you could have the other.
Auctionomics, a new startup launching tonight, is looking to add another layer of control to auctions on the web. The company has built a powerful backend SaaS solution that allows websites to conduct complex auctions, where the criteria involved are more complicated than simply determining the highest bidder for an item. It’s a bit confusing, but fortunately end users won’t have to deal with the intricacies of how the auctions run – they’ll just find that they have more of a choice when they’re bidding on items on the web.
Imagine trying to choose which hotel you’d like to stay in for an upcoming trip. Instead of having to simply sort by price, the engine would allow the user to enter more complex requests using conditional statements, submitting multiple bids at the same time. For example, if I was heading to Lake Tahoe, I could say I would be willing to pay $200 a night to stay at Harrah’s, but only if I could stay for three nights in a row at that price. In the same query, I could say I’d be willing to pay $150 a night to stay Caesars, but only if I could get that price for a whole week. And so on.
The service is powered by an engine called MaaX (Milgrom Assignment Auction), which was developed by Stanford professor Paul Milgrom, who designed the original auction system used for the FCC spectrum and has been involved with auction design and strategy for major companies and the government for decades. The system is built to maximize the number of bids from each participant, as well as gains for all parties involved. It does this in part by allowing users to submit queries with multiple variables, like setting a set spending limit across an entire multi-part bid, and allowing for substitutions between various items.
This all sounds pretty complicated (and it is), but co-founder Dr. Silvia Console-Battilana says the services that eventually implement the technology will be able to simplify the choices that users are exposed to. For example, a travel site could just show a few options at a time in a multi-step wizard, or it could simply reduce the number of available variables.
Beyond consumer sites, Auctionomics will appeal to a variety of other markets, like the energy industry. Whereas previous energy bids from energy companies would have to be placed separately, using MaaX energy companies could conditionally bid on energy from multiple sources (I could say I wanted up to 100 Watts from Northern California at $X and up to 200 Watts from Southern California for $Y, but that I did not want more than 150 Watts total).
While Auctionomics is not currently powering any public sites, the company is in discussions with a number of possible partners to implement its technology (though it sounds like it may be a while before any of them go live). This added control certainly sounds promising, I just hope that sites can find a way to give it to us without becoming overwhelming, otherwise users will shy away from it.