Agile Market EngineeringBridging the gap between business concepts and running markets

Since the advent of the Internet, electronic commerce has become an integral partof everyday life in most parts of the world. In 2009 private consumers in Germanypurchased goods and services worth 15.5bn EUR via e-commerce market places onthe Internet, an increase of 14.4% over the year before. In this light, design and implementationof electronic market platforms becomes very important. Consequently,much scientific research has been devoted to the question of “How to design electronicmarkets right?” Mechanism Design, a specialized discipline in theoretical economics,focuses on exactly this question and tries to find optimal market rules for a givenmarket environment. From this research stream many intriguing insights and resultson optimal market design have evolved. Still most of these results are restrictedby rather strong assumptions “as economists tend to provide models with attractiveequilibrium properties and recognizable strategic behaviors, often maintaininglimiting assumptions to take the edge off of the computational difficulties. Computationallyminded researchers, on the other hand, assume very simple player strategiesto assure nice equilibrium behavior, allowing them to focus on the complex biddingand decision making environments” (Anandalingam et al., 2005). Overall, explanatorypower of these results for real markets is limited. By today’s research standardsmarket reality is simply too complex to be comprehensively covered and describedby means of theoretic market models of one form or the other.The agile market engineering process model developed as part of this thesis buildson this insight and assumes that electronic markets for the real world cannot becompletely designed upfront due to complexity constraints and furthermore acknowledgesthat even small design changes can have a significant impact on user behaviorand market outcome. Instead, the proposed process model tries to bridge the gapbetween theoretic market design and practical (electronic) market platform development.Different to previous