Achieving Budget-Balance with Vickrey-Based Payment Schemes in Exchanges

DSpace/Manakin Repository

Achieving Budget-Balance with Vickrey-Based Payment Schemes in Exchanges

Citable link to this page

. . . . . .

Title: Achieving Budget-Balance with Vickrey-Based Payment Schemes in Exchanges
Author: Parkes, David C.; Kalagnanam, Jayant R.; Eso, Marta

Note: Order does not necessarily reflect citation order of authors.

Citation: Parkes, David C., Jayant R Kalagnanam, and Marta Eso. 2001. Achieving budget-balance with Vickrey-based payment schemes in exchanges. In IJCAI-01: Proceedings of the Seventeenth International Joint Conference on Artificial Intelligence: August 4-10, 2001, Seattle, Washington, ed. B. Nebel, International Joint Conferences on Artificial Intelligence, and American Association for Artificial Intelligence, 1161-1168. San Francisco, C.A.: Morgan Kaufman.
Full Text & Related Files:
Abstract: Generalized Vickrey mechanisms have received wide attention in the literature because they are efficient and strategy-proof, i.e. truthful bidding is optimal whatever the bids of other agents. However it is well-known that it is impossible for an exchange, with multiple buyers and sellers, to be efficient and budget-balanced, even putting strategy-proofness to one side. A market-maker in an efficient exchange must make more payments than it collects. We enforce budget-balance as a hard constraint, and explore payment rules to distribute surplus after an exchange clears to minimize distance to Vickrey payments. Different rules lead to different levels of truth-revelation and efficiency. Experimental and theoretical analysis suggest a simple Threshold scheme, which gives surplus to agents with payments further than a certain threshold value from their Vickrey payments. The scheme appears able to exploit agent uncertainty about bids from other agents to reduce manipulation and boost allocative efficiency in comparison with other simple rules.
Other Sources: http://www.eecs.harvard.edu/econcs/pubs/combexch01.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:4101693

Show full Dublin Core record

This item appears in the following Collection(s)

  • FAS Scholarly Articles [6902]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
 
 

Search DASH


Advanced Search
 
 

Submitters