Modularity and greed in double auctions

Paul Dütting, Tim Roughgarden, Inbal Talgam-Cohen
2014 Proceedings of the fifteenth ACM conference on Economics and computation - EC '14  
Designing double auctions is a complex problem, especially when there are restrictions on the sets of buyers and sellers that may trade with one another. The goal of this paper is to develop "black-box reductions" from doubleauction design to the exhaustively-studied problem of designing single-sided mechanisms. We consider several desirable properties of a double auction: feasibility, dominant-strategy incentive-compatibility, the still stronger incentive constraints offered by a
more » ... tance implementation, exact and approximate welfare maximization, and budget-balance. For each of these properties, we identify sufficient conditions on the two one-sided mechanisms-one for the buyers, one for the sellers-and on the method of composition, that guarantee the desired property of the double auction. Our framework also offers new insights into classic double-auction designs, such as the VCG and McAfee auctions with unit-demand buyers and unit-supply sellers.
doi:10.1145/2600057.2602854 dblp:conf/sigecom/DuttingRT14 fatcat:oceszlchvzhl5k75nnar7d7ttu