GTRF: Generalized Trade Reduction Framework for Double-Auction Mechanisms

Jacob Ehrlich (), Maximilian Moll and Stefan Pickl
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Jacob Ehrlich: Universität der Bundeswehr München
Maximilian Moll: Universität der Bundeswehr München
Stefan Pickl: Universität der Bundeswehr München

Chapter Chapter 73 in Operations Research Proceedings 2022, 2023, pp 611-616 from Springer

Abstract: Abstract In a groundbreaking paper McAfee introduced the Trade Reduction (TR) Mechanism that circumvents the famous Myerson and Satterthwaite impossibility result by sacrificing a small amount of efficiency. Here the author creates order statistics based on the submitted bids and reduces at most the least efficient trade. Based on this principle an alternate mechanism was proposed by Segal-Halevi et al. which extends this to the strongly budget balanced setting. This paper proposes a generalization of these two TR mechanisms to fit into a larger framework that can be implemented based on the market in which the auction is to be applied. Additionally, by taking advantage of the relationship of bid order-statistics a novel mechanism; titled BORS, is revealed to complete the GTRF. Using a simulation based evaluation, performance is characterized across various settings in order to achieve optimized results.

Keywords: Auctions/competitive bidding; Simulation (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-3-031-24907-5_73

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