Double auctions with no-loss constrained traders | Zendy

Nejat Anbarcı | Zendy; Jaideep Roy | Zendy

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Double auctions with no-loss constrained traders

Author(s) -

Nejat Anbarcı,

Jaideep Roy

Publication year - 2017

Publication title -

theory and decision

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.602

H-Index - 37

eISSN - 1573-7187

pISSN - 0040-5833

DOI - 10.1007/s11238-017-9627-7

Subject(s) - common value auction , dual (grammatical number) , construct (python library) , economics , microeconomics , budget constraint , mathematical economics , work (physics) , simple (philosophy) , computer science , mathematical optimization , mathematics , mechanical engineering , art , literature , engineering , programming language , philosophy , epistemology

Do hard budget constraints work in favour or against truth telling in double auctions? McAfee (1992) constructed a simple double auction mechanism (MDA), which is strategyproof and minimally inefficient, but may resort to dual prices, where the difference between prices is channelled as a surplus to the market maker, preventing MDA from achieving a balanced budget. We construct a variant of MDA in which no-loss constraints play a major positive role. Our variant of MDA is also strategyproof, as efficient as MDA but improves on it by achieving a balanced budget via always having a uniform price.

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