Multicommodity Auction Model for Indivisible Network Resource Allocation

In this paper we present the multicommodity auction model BCBT-I that allocates indivisible network resources among bidders. The approach can be considered as a generalization of the basic multicommodity model for balancing communication bandwidth trade (BCBT). The BCBT model assumes that offers concerning inter-node links and point-to-point bandwidth demands can be realized partially. However, in the real-world trade there might be a need to include capacity modularity in the market balancing process. Thus we state the model for balancing communication bandwidth trade that takes into account the indivisibility of traded bandwidth modules. This requires to solve a mixed integer problem and increases computational complexity. Furthermore, the pricing issue appears nontrivial, as the dual prices cannot be longer used to set fair, competitive market prices. For clearing the market, we examine the multicommodity pricing mechanizm based on differentiation of buy and sell market prices.