SBBA: A strongly-budget-balanced double-auction mechanism

Erel Segal-Halevi; Avinatan Hassidim; Yonatan Aumann

doi:10.1007/978-3-662-53354-3_21

SBBA: A strongly-budget-balanced double-auction mechanism

Erel Segal-Halevi, Avinatan Hassidim, Yonatan Aumann

Department of Computer Science

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

20 Scopus citations

Abstract

In a seminal paper, McAfee (1992) presented the first dominant strategy truthful mechanism for double auction. His mechanism attains nearly optimal gain-from-trade when the market is sufficiently large. However, his mechanism may leave money on the table, since the price paid by the buyers may be higher than the price paid to the sellers. This money is included in the gain-from-trade and in some cases it accounts for almost all the gain-from-trade, leaving almost no gain-from trade to the traders. We present SBBA: a variant of McAfee’s mechanism which is strongly budget-balanced. There is a single price, all money is exchanged between buyers and sellers and no money is left on the table. This means that all gain-from-trade is enjoyed by the traders. We generalize this variant to spatially-distributed markets with transit costs.

Original language	English
Title of host publication	Algorithmic Game Theory - 9th International Symposium, SAGT 2016, Proceedings
Editors	Martin Gairing, Rahul Savani
Publisher	Springer Verlag
Pages	260-272
Number of pages	13
ISBN (Print)	9783662533536
DOIs	https://doi.org/10.1007/978-3-662-53354-3_21
State	Published - 2016
Event	9th International Symposium on Algorithmic Game Theory, SAGT 2016 - Liverpool, United Kingdom Duration: 19 Sep 2016 → 21 Sep 2016

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	9928 LNCS
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Conference

Conference	9th International Symposium on Algorithmic Game Theory, SAGT 2016
Country/Territory	United Kingdom
City	Liverpool
Period	19/09/16 → 21/09/16

Bibliographical note

Publisher Copyright:
© Springer-Verlag Berlin Heidelberg 2016.

Keywords

Budget balance
Double auction
Gain from trade
Mechanism design
Social welfare
Spatially distributed market

Access to Document

10.1007/978-3-662-53354-3_21

Cite this

Segal-Halevi, E., Hassidim, A., & Aumann, Y. (2016). SBBA: A strongly-budget-balanced double-auction mechanism. In M. Gairing, & R. Savani (Eds.), Algorithmic Game Theory - 9th International Symposium, SAGT 2016, Proceedings (pp. 260-272). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 9928 LNCS). Springer Verlag. https://doi.org/10.1007/978-3-662-53354-3_21

Segal-Halevi, Erel ; Hassidim, Avinatan ; Aumann, Yonatan. / SBBA : A strongly-budget-balanced double-auction mechanism. Algorithmic Game Theory - 9th International Symposium, SAGT 2016, Proceedings. editor / Martin Gairing ; Rahul Savani. Springer Verlag, 2016. pp. 260-272 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).

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abstract = "In a seminal paper, McAfee (1992) presented the first dominant strategy truthful mechanism for double auction. His mechanism attains nearly optimal gain-from-trade when the market is sufficiently large. However, his mechanism may leave money on the table, since the price paid by the buyers may be higher than the price paid to the sellers. This money is included in the gain-from-trade and in some cases it accounts for almost all the gain-from-trade, leaving almost no gain-from trade to the traders. We present SBBA: a variant of McAfee{\textquoteright}s mechanism which is strongly budget-balanced. There is a single price, all money is exchanged between buyers and sellers and no money is left on the table. This means that all gain-from-trade is enjoyed by the traders. We generalize this variant to spatially-distributed markets with transit costs.",

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Segal-Halevi, E, Hassidim, A & Aumann, Y 2016, SBBA: A strongly-budget-balanced double-auction mechanism. in M Gairing & R Savani (eds), Algorithmic Game Theory - 9th International Symposium, SAGT 2016, Proceedings. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 9928 LNCS, Springer Verlag, pp. 260-272, 9th International Symposium on Algorithmic Game Theory, SAGT 2016, Liverpool, United Kingdom, 19/09/16. https://doi.org/10.1007/978-3-662-53354-3_21

SBBA: A strongly-budget-balanced double-auction mechanism. / Segal-Halevi, Erel; Hassidim, Avinatan ; Aumann, Yonatan.
Algorithmic Game Theory - 9th International Symposium, SAGT 2016, Proceedings. ed. / Martin Gairing; Rahul Savani. Springer Verlag, 2016. p. 260-272 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 9928 LNCS).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

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Segal-Halevi E, Hassidim A , Aumann Y. SBBA: A strongly-budget-balanced double-auction mechanism. In Gairing M, Savani R, editors, Algorithmic Game Theory - 9th International Symposium, SAGT 2016, Proceedings. Springer Verlag. 2016. p. 260-272. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)). doi: 10.1007/978-3-662-53354-3_21

SBBA: A strongly-budget-balanced double-auction mechanism

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