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

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

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dc.contributor.author Parkes, David C.
dc.contributor.author Kalagnanam, Jayant R.
dc.contributor.author Eso, Marta
dc.date.accessioned 2010-05-18T19:06:04Z
dc.date.issued 2001
dc.identifier.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. en_US
dc.identifier.isbn 9781558607774 en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:4101693
dc.description.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. en_US
dc.description.sponsorship Engineering and Applied Sciences en_US
dc.language.iso en_US en_US
dc.relation.hasversion http://www.eecs.harvard.edu/econcs/pubs/combexch01.pdf en_US
dash.license LAA
dc.title Achieving Budget-Balance with Vickrey-Based Payment Schemes in Exchanges en_US
dc.type Monograph or Book en_US
dc.description.version Accepted Manuscript en_US
dash.depositing.author Parkes, David C.
dc.date.available 2010-05-18T19:06:04Z

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  • FAS Scholarly Articles [7495]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University

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