Auctions, Market Mechanisms and Their Applications. First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers

Research Article

Information Feedback and Efficiency in Multiattribute Double Auctions

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  • @INPROCEEDINGS{10.1007/978-3-642-03821-1_6,
        author={Kevin Lochner and Michael Wellman},
        title={Information Feedback and Efficiency in Multiattribute Double Auctions},
        proceedings={Auctions, Market Mechanisms and Their Applications. First International ICST Conference, AMMA 2009, Boston, MA, USA, May 8-9, 2009, Revised Selected Papers},
        proceedings_a={AMMA},
        year={2012},
        month={5},
        keywords={},
        doi={10.1007/978-3-642-03821-1_6}
    }
    
  • Kevin Lochner
    Michael Wellman
    Year: 2012
    Information Feedback and Efficiency in Multiattribute Double Auctions
    AMMA
    Springer
    DOI: 10.1007/978-3-642-03821-1_6
Kevin Lochner1,*, Michael Wellman2,*
  • 1: RentMineOnline.com
  • 2: University of Michigan
*Contact email: kevin@rentmineonline.com, wellman@umich.edu

Abstract

We investigate tradeoffs among expressiveness, operational cost, and economic efficiency for a class of multiattribute double-auction markets. To enable polynomial-time clearing and information feedback operations, we restrict the bidding language to a form of multiattribute OR-of-XOR expressions. We then consider implications of this restriction in environments where bidders’ preferences lie within a strictly larger class, that of complement-free valuations. Using valuations derived from a supply chain scenario, we show that an iterative bidding protocol can overcome the limitations of this language restriction. We further introduce a metric characterizing the degree to which valuations violate the substitutes condition, theoretically known to guarantee efficiency, and present experimental evidence that the actual efficiency loss is proportional to this metric.