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In this paper we propose a two-stage protocol for resource management in ahierarchically organized cloud. The first stage exploits spatial locality forthe formation of coalitions of supply agents; the second stage, a combinatorialauction, is based on a modified proxy-based clock algorithm and has two phases,a clock phase and a proxy phase. The clock phase supports price discovery; inthe second phase a proxy conducts multiple rounds of a combinatorial auctionfor the package of services requested by each client. The protocol strikes abalance between low-cost services for cloud clients and a decent profit for theservice providers. We also report the results of an empirical investigation ofthe combinatorial auction stage of the protocol.

Coalition Formation and Combinatorial Auctions; Applications to Self-organization and Self-management in Utility Computing