Unsorting Algorithms for an Ordered List and Its Application to Business Simulations

Abstract

When unbranded products are sold periodically in lots at auction to the highest bidder, the order in which the lots are placed into auction matters, because earlier lots generally will fetch higher prices than later lots. When the lots are ordered by their lowest reserve prices, suppliers who latch on to the equilibrium reserve price first should have a first-mover advantage that decays over time, as arranged by an unsorting algorithm. Such algorithms have three attributes: choice of target, distance of movement, and directional probability. The simple top-down, single-step, no-upward-movement algorithm is flawed. A compound algorithm may be satisfactory. Other algorithms may be more efficient. These ideas may have application in electronic business.