Specifying and Monitoring Market Mechanisms Using Rights and Obligations

Abstract

We provide a formal scripting language to capture the semantics of market mechanisms. The language is based on a set of well-defined principles, and is designed to capture an agent’s rights, as derived from property, and an agent’s obligations, as derived from restrictions placed on its actions, either voluntarily or as a consequence of other actions. Rights and obligations are viewed as first-class goods, from which we define fundamental axioms about well-functioning market-oriented worlds. Coupled with the scripting language is a run-time system that is able to monitor and enforce rights and obligations. Our treatment extends to represent a variety of market mechanisms, ranging from simple two-agent single-good exchanges to complicated combinatorial auctions.