The Optimality of a Simple Market Mechanism Export

@article{sattwill02, abstract = {Strategic behavior in a finite market can cause inefficiency in the allocation, and market mechanisms differ in how successfully they limit this inefficiency. A method for ranking algorithms in computer science is adapted here to rank market mechanisms according to how quickly inefficiency diminishes as the size of the market increases. It is shown that trade at a single market-clearing price in the k-double auction is worst-case asymptotic optimal among all plausible mechanisms: evaluating mechanisms in their least favorable trading environments for each possible size of the market, the k-double auction is shown to force the worst-case inefficiency to zero at the fastest possible rate.}, author = {Satterthwaite, Mark A. and Williams, Steven R.}, citeulike-article-id = {4606359}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/3082022}, citeulike-linkout-1 = {http://www.jstor.org/stable/3082022}, doi = {10.2307/3082022}, issn = {00129682}, journal = {Econometrica}, keywords = {double-auctions, efficiency, market-mechanisms}, number = {5}, pages = {1841--1863}, posted-at = {2009-06-10 10:31:56}, priority = {2}, publisher = {The Econometric Society}, title = {The Optimality of a Simple Market Mechanism}, url = {http://dx.doi.org/10.2307/3082022}, volume = {70}, year = {2002} }

TY - JOUR ID - sattwill02 L3 - citeulike-article-id:4606359 N2 - Strategic behavior in a finite market can cause inefficiency in the allocation, and market mechanisms differ in how successfully they limit this inefficiency. A method for ranking algorithms in computer science is adapted here to rank market mechanisms according to how quickly inefficiency diminishes as the size of the market increases. It is shown that trade at a single market-clearing price in the k-double auction is worst-case asymptotic optimal among all plausible mechanisms: evaluating mechanisms in their least favorable trading environments for each possible size of the market, the k-double auction is shown to force the worst-case inefficiency to zero at the fastest possible rate. IS - 5 JF - Econometrica SN - 00129682 EP - 1863 TI - The Optimality of a Simple Market Mechanism PB - The Econometric Society VL - 70 SP - 1841 KW - double-auctions KW - efficiency KW - market-mechanisms AU - Satterthwaite, Mark AU - Williams, Steven PY - 2002/// UR - http://dx.doi.org/10.2307/3082022 ER -