Modularity and greed in double auctions

Paul Dütting, Tim Roughgarden, Inbal Talgam-Cohen

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Designing double auctions is a complex problem, especially when there are restrictions on the sets of buyers and sellers that may trade with one another. The goal of this paper is to develop "black-box reductions" from double-auction design to the exhaustively-studied problem of designing single-sided mechanisms. We consider several desirable properties of a double auction: feasibility, dominant-strategy incentive-compability, the still stronger incentive constraints offered by a deferred-acceptance implementation, exact and approximate welfare maximization, and budget-balance. For each of these properties, we identify sufficient conditions on the two one-sided mechanisms - one for the buyers, one for the sellers - and on the method of composition, that guarantee the desired property of the double auction. Our framework also offers new insights into classic double-auction designs, such as the VCG and McAfee auctions with unit-demand buyers and unit-supply sellers.

Original languageEnglish
Title of host publicationEC 2014 - Proceedings of the 15th ACM Conference on Economics and Computation
Pages241-258
Number of pages18
DOIs
StatePublished - 2014
Externally publishedYes
Event15th ACM Conference on Economics and Computation, EC 2014 - Palo Alto, CA, United States
Duration: 8 Jun 201412 Jun 2014

Publication series

NameEC 2014 - Proceedings of the 15th ACM Conference on Economics and Computation

Conference

Conference15th ACM Conference on Economics and Computation, EC 2014
Country/TerritoryUnited States
CityPalo Alto, CA
Period8/06/1412/06/14

Keywords

  • deferred-acceptance auctions
  • trade reduction mechanism

All Science Journal Classification (ASJC) codes

  • Computer Science (miscellaneous)

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