Under certain circumstances, it will make more sense, or at least be more realistic, for agents to determine which markets are created. For example, when an agent represents an outside vendor, especially a brand-name vendor, the vendor may very well want to establish its own market. Also, as buyer agents and/or recommending organizations learn which information providers and kinds of services they prefer, they should be free to establish markets which capture these preferences [21].
However, allowing agents to decide which markets to create means that the externalities involved in creating an auction, such as the costs to the system and other users, must be internalized in the form of auction fees. The fees need to be set so as to provide the right incentives for agents not to abuse the auction creation mechanism. We are in the process of exploring how to set these fees. Some requirements are that the fee structure needs to be kept simple, as complicated schemes may create additional costs that overwhelm the original system costs involved. Reasonable choices include setting a small flat fee per auction transaction, a small percentage fee per transaction or a rental fee per time period that the agent who creates the auction pays.
In deciding whether to establish a new market, an agent may find it useful to consider information about related product auction prices, transaction volumes and frequency, and unmet user demands. This was discussed in Section 3.3