One-sided Auctions Research Articles

Double Auction on Diffusion Network

Mechanism design on social networks has attracted extensive attention recently. The goal is to design mechanisms to incentivize participants to invite more participants via their social networks, and the challenge is that the participants are competitors. Various mechanisms have been proposed for single-/multiple-unit auctions, but it has been shown that it is challenging to design such mechanisms for more complex settings. We move this forward to investigate a double auction on a network where each trader (a buyer or a seller) can link to other buyers and sellers. Incentiving invitation is more difficult than in multi-unit one-sided auctions, because there are two different roles and a buyer (seller) seems happy to invite a seller (buyer), but again the invited seller (buyer) may invite another buyer (seller) to compete with the original buyer (seller). To combat this, we propose a solution called dynamic trade reduction (DTR), which also guarantees a non-negative revenue for the market owner. Interestingly, our solution is also applicable to the multi-unit one-sided auction when there is only one seller linking to only buyers on the network. We believe that the principle of our solution has the potential to be extended to design the multi-item one-sided auction.

District heating system as the infrastructure for competition among producers in the heat market

Heating and electricity account for one-quarter of annual global greenhouse gas emissions. Many countries still use natural gas and oil for central heating, but interest in district heating as a possible low-carbon alternative is growing. District heating is well-developed in some countries, such as Sweden, Denmark, Poland, and Lithuania. However, there are considerable differences in the organisation of district heating markets in different countries. As these differences may have apparent implications for district heat pricing, competitiveness against other heat supply options, and clean energy uptake, this research explores existing approaches toward competition in the district heating market. We describe the differences in the conceptual frameworks and quantitative outcomes of district heat markets in selected countries and discuss the consequences of the different approaches. This study also considers the possible impacts on consumer prices relative to market opening to competition among heat producers. An important conclusion is that introducing third-party access on the supply side and a one-sided auction may positively affect consumer price downhill development. Finally, we provide insights that could interest other countries and contribute to the future development of the district heating market.

COMBIMA: truthful, budget maintaining, dynamic combinatorial market

One-sided auctions have long been studied in economics and the computer science multi-agent planning domain [10, 12, 21]. Onesided auctions aim to find a high-social welfare (SWF) (efficient) allocation of a commodity to a set of agents, while ensuring that agents' best strategy is to truthfully report their input. An important extension of one-sided auctions are one-sided combinatorial auctions [17, 19, 20] where multiple commodities are offered for sale. Agents bid on bundles of commodities, which allows agents to express complex preferences over subsets of commodities (see [9] for many examples within). An elegant and well-studied class of combinatorial one-sided auctions are the sequential posted price auctions in which agents are presented sequentially with a vector of prices and must choose their preferred bundle given the price vector (among the first studied are [1, 18]). One-sided combinatorial auctions have been applied to various problems, including airport time-slot allocation [17], distributed query optimization [20] and transportation service procurement [19].

Truthful budget constrained auction for device-to-device relaying packet allocation

Taking advantage of peer-to-peer transmission underlying cellular networks, device-to-device (D2D) communications offer various benefits such as coverage extension, traffic offloading, and improved energy efficiency. In this paper, we focus on a promising scenario where a D2D local area network is formed to relay packets for an out-of-coverage source device. A one-sided auction model is formulated from a unique perspective in which the source device decides the allocation of its packets among the helpers and charges reserve payments to the helpers according to their bids. The winning helpers only collect rewards from the source's deposit at the base station when the assigned packets are successfully relayed. In this model, we further take into account the budget constraints of the helpers to capture the helpers' resource limits and the risks that the helpers are willing to take. Based on this model, we propose three auction mechanisms targeting economic properties such as individual rationality, efficiency, and truthfulness. An enhanced Martello & Toth algorithm is first developed for the VCG-based auction to determine packet allocation that optimizes the source's quality of service. The probabilistic entrance auction mechanism uses sequential second price auction to achieve a low computational cost. The randomized mechanism involves a randomization over the above two mechanisms to satisfy certain requirement for social welfare while minimizing the computational time. We also conduct extensive simulations to examine the performance of the proposed mechanisms.

Online double auction mechanism for perishable goods

One-sided auctions are used for market clearing in the spot markets for perishable goods because production cost in spot markets is already “sunk.” Moreover, the promptness and simplicity of one-sided auctions are beneficial for trading in perishable goods. However, sellers cannot participate in the price-making process in these auctions. A standard double auction market collects bids from traders and matches the higher bids of buyers and lower bids of sellers to find the most efficient allocation, assuming that the value of unsold items remains unchanged. Nevertheless, in the market for perishable goods, sellers suffer a loss when they fail to sell their goods, because their salvage values are lost when the goods perish. To solve this problem, we investigate the suitable design of an online double auction for perishable goods, where bids arrive dynamically with their time limits. Our market mechanism aims at improving the profitability of traders by reducing trade failures in the face of uncertainty of incoming/departing bids. We develop a heuristic market mechanism with an allocation policy that prioritizes bids of traders based on their time-criticality, and evaluate its performance experimentally using multi-agent simulation. We find out that our market mechanism realizes efficient and fair allocations among traders with approximately truthful behavior in different market situations.

Demande active sur les marchés électriques : une analyse expérimentale de l'efficacité du mécanisme de retrait de capacités demandées

This paper presents an experimental investigation of the effects of a demand-response mechanism on the efficiency of competitive wholesale electric-power markets. Under most electricity deregulation , attention has initially and exclusively been placed on the supply side of the industry. Demand has been assumed to be largely inelastic and therefore not calling for specific incentive mechanisms. As a consequence, many power markets turned out to be organized using one-sided auctions – with diverse and sometimes embarrassing market performances a decade after the first deregulation. This suggests that the foundations of power-market designs should be re-examined. Many regulators are now integrating the demand side of the industry into their power markets , searching for efficient demand-response mechanisms. Earlier experimental studies have shown the significance of demand-side bidding in electric-power markets. Our article presents a series of experiments designed to test a simple demand-response mechanism in the form of demand withdrawals, as proposed by the Australian authorities. The results show that although the mechanism leads to significant reductions in market prices in peak-demand periods, it fosters gaming strategies that suggest it might perform poorly in the field.

A False-name-Proof Double Auction Protocol for Arbitrary Evaluation Values

We develop a new false-name-proof double auction protocol called the Generalized Threshold Price Double auction (GTPD) protocol. False-name-proofness generalizes strategy-proofness by incorporating the possibility of false-name bids, e.g., bids submitted using multiple e-mail addresses. An existing protocol called TPD protocol is false-name-proof but can handle only the cases where marginal utilities of each agent always decrease, while our new GTPD protocol can handle arbitrary evaluation values. When marginal utilities can increase, some bids cannot be divided into a single unit (e.g., an all-or-nothing bid). Due to the existence of such indivisible bids, meeting supply/demand becomes difficult. Furthermore, a seller/buyer can submit a false-name-bid by pretending to be a potential buyer/seller to manipulate allocations and payments. In the GTPD protocol, the auctioneer is required to absorb the supply-demand imbalance up to a given upper-bound. Also, the GTPD incorporate a new false-name-proof one-sided auction protocol that is guaranteed to sell/buy a certain number of units. Simulation results show that when the threshold price is set appropriately, this protocol can obtain a good social surplus, and the number of absorbed units is much smaller than the given upper-bound.

Evolution, efficiency and noise traders in a one-sided auction market

Natural selection is used to examine a one-sided buyer auction market. With each trader's behavior preprogrammed with its own inherent and fixed probabilities of overpredicting, predicting correctly and underpredicting the fundamental value of the asset, informational efficiency occurs. If each buyer's initial wealth is sufficiently small relative to the market supply and if the variation in the asset's random shock is sufficiently small, then as time gets sufficiently large, the proportion of time, that the asset price is arbitrarily close to the fundamental value, converges to one with probability one. This is established under a weak restriction regarding traders’ behavior.

Collusion without conspiracy: An experimental study of one-sided auctions

Collusion without conspiracy: An experimental study of one-sided auctions

Collusion without conspiracy: An experimental study of one-sided auctions

The study investigates collusion-nonfacilitating features of one-sided auctions. We report the results of oral nondescending bid auction experiments in which the strict bid improvement rule was absent, and compare them with the results of sealed bid auction experiments. In the sealed bid experiments the outcomes converged to the competitive equilibrium. In the oral auctions, collusive outcomes emerged and were sustained with bidders using bid matching strategies. We conclude that oral auctions provide opportunities for tacit coordination and collusion enforcement that do not exist under the sealed bid. Therefore, the strict bid improvement rule becomes critical for breaking collusion.