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- Title
Double auctions with no-loss constrained traders.
- Authors
Anbarci, Nejat; Roy, Jaideep
- Abstract
Do hard budget constraints work in favour or against truth telling in double auctions? McAfee (1992) constructed a simple double auction mechanism (MDA), which is strategyproof and minimally inefficient, but may resort to dual prices, where the difference between prices is channelled as a surplus to the market maker, preventing MDA from achieving a balanced budget. We construct a variant of MDA in which no-loss constraints play a major positive role. Our variant of MDA is also strategyproof, as efficient as MDA but improves on it by achieving a balanced budget via always having a uniform price.
- Subjects
AUCTIONS; BUDGET; ECONOMIC efficiency; SUNSPOTS (Economics); THEORY of constraints
- Publication
Theory & Decision, 2018, Vol 84, Issue 1, p1
- ISSN
0040-5833
- Publication type
Article
- DOI
10.1007/s11238-017-9627-7