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Achieving Budget-Balance with Vickrey-Based Payment Schemes in Exchanges (2001)
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| Venue: | In Proceedings of the 17th International Joint Conference on Artificial Intelligence |
| Citations: | 108 - 20 self |
BibTeX
@INPROCEEDINGS{Parkes01achievingbudget-balance,
author = {David C. Parkes and Jayant Kalagnanam and Marta},
title = {Achieving Budget-Balance with Vickrey-Based Payment Schemes in Exchanges},
booktitle = {In Proceedings of the 17th International Joint Conference on Artificial Intelligence},
year = {2001},
pages = {1161--1168}
}
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Abstract
Generalized Vickrey mechanisms have received wide attention in the literature because they are efficient and strategyproof, 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 truthrevelation 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.
Keyphrases
vickrey-based payment scheme vickrey payment different level allocative efficiency different rule simple rule payment rule truthful bidding agent uncertainty theoretical analysis efficient exchange certain threshold value wide attention multiple buyer vickrey mechanism hard constraint simple threshold scheme
