Agent Competition Double-Auction Mechanism

Leon Yang Chu () and Zuo-Jun Max Shen ()
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Leon Yang Chu: Marshall School of Business, University of Southern California, Los Angeles, California 90089
Zuo-Jun Max Shen: Department of Industrial Engineering and Operations Research, University of California, Berkeley, California 94720

Management Science, 2006, vol. 52, issue 8, 1215-1222

Abstract: This paper proposes an agent competition double-auction mechanism to simplify decision making and promote transactions for the customer-to-customer marketplaces. Under the proposed double-auction mechanism, bidding one's true valuation (private information) is the best strategy for each individual buyer and seller even when shipping costs and sales taxes are different across various possible transactions. The proposed mechanism also achieves budget balance and asymptotic efficiency. Furthermore, these results not only hold for an environment where buyers and sellers exchange identical commodities, but also can be extended to an environment with multiple substitutable commodities.

Keywords: mechanism design; double auction; strategyproof mechanism (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:52:y:2006:i:8:p:1215-1222

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