Modeling approach for auction based markets

Designing and conceptualizing electronic auction systems is a complex task dependent on human, economic, and technical factors. In this paper, we propose a way to simplify that design task and reduce complexity. Using the two software engineering approaches "abstraction" and "divide and conquer" we show how these approaches can be mapped into auction design. The "abstraction" approach leads to a process template that can be parameterized; the "divide and conquer" approach leads to a component based definition of electronic auctions. Both approaches are unified within a "market modeling language (MML)" which provides the design of auction based electronic markets.