Web service based applications for electronic labor markets: A Multi-dimensional Price VCG Auction with Individual Utilities

We design an efficient and transaction cost reduc- ing Vickrey-Clarke-Groves auction as part of a web service for the work allocation problem in temporary employment agencies. In this auction bids are work contracts with multi- dimensional salaries. To compute the allocation we assume that every temporary employment worker conveys a utility function specifying the utility gained from working a given job for a salary consisting of multiple components. We then embed the designed mechanism in an updated transaction phase model describing the repeated allocation of temporary agency workers to work assignments. We prove that the designed auction mechanism at the heart of the web service satisfies Incentive Compatibility and Pareto Efficiency.