Designing a Refundable Auction for Limited Capacity Suppliers

In this paper, we explore two categories of auction-based mechanisms for task allocation in environments where service providers have finite capacities and consumers could withdraw their bids. We specially explore the auction- based refund mechanisms for boosting seller´s revenue from the single stage and multistage perspectives. Among these methods, fixed cancellation fee auction and decreasing cancellation fee auction mechanisms can satisfy incentive compatibility and individual rationality properties but still hold a high efficiency. In particular, the extension of decreasing cancellation fee auction mechanism can support overbooking in the form of the leveled commitment contract. The experimental results illustrate that these methods achieve higher efficiency than the traditional counterparts such as the fixed price-refund pair method.