Skip to main content
SpringerLink
Log in

A Game-Theoretical Analysis of Charging Strategies for Competing Double Auction Marketplaces

  • Conference paper
  • First Online:
Multi-Agent Systems and Agreement Technologies (EUMAS 2020, AT 2020)

Part of the book series: Lecture Notes in Computer Science ((LNAI,volume 12520))

Abstract

The double auction marketplaces usually charge fees to traders to make profits, but little work has been done on analyzing how marketplaces charge appropriate fees to make profits in multiple marketplaces competing environment. In this paper, we investigate this problem by using game theory. Specifically, we consider four typical types of fees, and use Fictitious Play algorithm to analyze the Nash equilibrium market selection and bidding strategy of traders in competing environment when different types of fees are charged. Building on this, we draw insights about how the marketplaces charge strategies in equilibrium when sellers and buyers have made the choice of the marketplace and bid in Nash equilibrium. Furthermore, we investigate which type of fees is more competitive in terms of maximizing profits while keeping traders staying in the marketplaces. Our experimental results provide useful insights on setting charging strategies for competing double auction marketplaces.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

Notes

  1. 1.

    The type of a buyer is its limit price, the highest price it is willing to buy the item for, and the type of a seller is its cost price, the lowest price it is willing to sell the item for.

  2. 2.

    http://gambit-project.org.

  3. 3.

    We also tried other settings. However, we still obtained the similar results.

  4. 4.

    Note that our algorithms allow more than two competing marketplaces and more sellers and buyers. However, in this paper, we focus on the typical setting with two marketplaces.

References

  1. An, D., Yang, Q., Yu, W., Yang, X., Fu, X., Zhao, W.: Soda: strategy-proof online double auction scheme for multimicrogrids bidding. IEEE Trans. Syst. Man Cybern. Syst. 48(7), 1177–1190 (2017)

    Article  Google Scholar 

  2. Brown, G.W.: Iterative solution of games by fictitious play. Act. Anal. Prod. Alloc. 13(1), 374–376 (1951)

    MathSciNet  MATH  Google Scholar 

  3. Cai, K., Niu, J., Parsons, S.: On the economic effects of competition between double auction markets. In: Ketter, W., La Poutré, H., Sadeh, N., Shehory, O., Walsh, W. (eds.) AMEC/TADA -2008. LNBIP, vol. 44, pp. 88–102. Springer, Heidelberg (2010). https://doi.org/10.1007/978-3-642-15237-5_7

    Chapter  Google Scholar 

  4. Cai, K., Niu, J., Parsons, S.: On the effects of competition between agent-based double auction markets. Electron. Comm. Res. Appl. 13(4), 229–242 (2014)

    Article  Google Scholar 

  5. Caillaud, B., Jullien, B.: Chicken & egg: competition among intermediation service providers. RAND J. Econ. 34, 309–328 (2003)

    Article  Google Scholar 

  6. Chowdhury, M.M.P., Kiekintveld, C., Son, T.C., Yeoh, W.: Bidding strategy for periodic double auctions using Monte Carlo tree search. In: Proceedings of the 17th International Conference on Autonomous Agents and Multi-agent Systems, pp. 1897–1899. International Foundation for Autonomous Agents and Multi-agent Systems (2018)

    Google Scholar 

  7. Friedman, D., Rust, J.: The Double Auction Market: Institutions. Santa Fe Institute Studies in the Science of Complexity, vol. XIV. Theories And Evidence. Perseus Publishing, New York (1993)

    Google Scholar 

  8. Fudenberg, D., Tirole, J.: Game Theory. The MIT Press, Cambridge (1991)

    MATH  Google Scholar 

  9. Gjerstad, S., Dickhaut, J.: Price formation in double auctions. Games Econ. Behav. 22, 1–29 (1998)

    Article  MathSciNet  MATH  Google Scholar 

  10. Gode, D.K., Sunder, S.: Allocative efficiency of markets with zero-intelligence traders: Market as a partial substitute for individual rationality. J. Polit. Econ. 101(1), 119–137 (1993)

    Article  Google Scholar 

  11. Jackson, M.O., Swinkels, J.M.: Existence of equilibrium in single and double private value auctions 1. Econometrica 73(1), 93–139 (2005)

    Article  MathSciNet  MATH  Google Scholar 

  12. Kelly, F.P., Maulloo, A.K., Tan, D.K.: Rate control for communication networks: shadow prices, proportional fairness and stability. J. Oper. Res. Soc. 49(3), 237–252 (1998)

    Article  MATH  Google Scholar 

  13. Ma, H., Leung, H.F.: An adaptive attitude bidding strategy for agents in continuous double auctions. Electron. Comm. Res. Appl. 6(4), 383–398 (2007)

    Article  Google Scholar 

  14. Milgrom, P.: Auctions and bidding: a primer. J. Econ. Perspect. 3(3), 3–22 (1989)

    Article  Google Scholar 

  15. Miller, T., Niu, J.: An assessment of strategies for choosing between competitive marketplaces. Electron. Comm. Res. Appl. 11(1), 14–23 (2012)

    Article  Google Scholar 

  16. Phelps, S., McBurney, P., Parsons, S.: Evolutionary mechanism design: a review. Auton. Agents Multi-Agent Syst. 21(2), 237–264 (2010)

    Article  Google Scholar 

  17. Rabinovich, Z., Gerding, E.H., Polukarov, M., Jennings, N.R.: Generalised fictitious play for a continuum of anonymous players. In: Proceedings of the 21st Joint Conference on Artificial Intelligence, pp. 245–250 (2009)

    Google Scholar 

  18. Ramos, S.B.: Competition between stock exchanges: a survey. In: FAME Research Paper (77) (2003)

    Google Scholar 

  19. Reny, P.J., Perry, M.: Toward a strategic foundation for rational expectations equilibrium. Econometrica 74(5), 1231–1269 (2006)

    Article  MathSciNet  MATH  Google Scholar 

  20. Rogers, A., David, E., Jennings, N.R., Schiff, J.: The effects of proxy bidding and minimum Bid increments within eBay auctions. ACM Trans. Web (TWEB) 1(2), 9 (2007)

    Article  Google Scholar 

  21. Shamma, J.S., Arslan, G.: Dynamic fictitious play, dynamic gradient play, and distributed convergence to Nash equilibria. IEEE Trans. Autom. Control 50(3), 312–327 (2005)

    Article  MathSciNet  MATH  Google Scholar 

  22. Shi, B., Gerding, E.H., Vytelingum, P., Jennings, N.R.: An equilibrium analysis of market selection strategies and fee strategies in competing double auction marketplaces. Autonom. Agents Multi-Agent Syst. 26(2), 245–287 (2013)

    Article  Google Scholar 

  23. Smith, V.L.: An experimental study of competitive market behavior. J. Polit. Econ. 70, 111–137 (1962)

    Article  Google Scholar 

  24. Tatur, T.: On the trade off between deficit and inefficiency and the double auction with a fixed transaction fee. Econometrica 73(2), 517–570 (2005)

    Article  MathSciNet  MATH  Google Scholar 

  25. Wang, S., Xu, P., Xu, X., Tang, S., Li, X., Liu, X.: Toda: Truthful online double auction for spectrum allocation in wireless networks. In: 2010 IEEE Symposium on New Frontiers in Dynamic Spectrum (DySPAN), pp. 1–10. IEEE (2010)

    Google Scholar 

Download references

Acknowledgement

This paper was funded by the Humanity and Social Science Youth Research Foundation of Ministry of Education (Grant No. 19YJC790111), the Philosophy and Social Science Post-Foundation of Ministry of Education (Grant No. 18JHQ060), Shenzhen Basic Research Foundation (General Program, Grant No. JCYJ20190809175613332) and the Innovation Foundation for Industry, Education and Research in Universities of Science and Technology Development Center of Ministry of Education (Grant No. 2018A02030).

Author information

Authors and Affiliations

  1. Wuhan University of Technology, Wuhan, 430070, China

    Bing Shi & Xiao Li

  2. Shenzhen Research Institute of Wuhan University of Technology, Shenzhen, 518000, China

    Bing Shi

  3. State Key Laboratory for Novel Software Technology at Nanjing University, Nanjing, 210023, China

    Bing Shi

Authors
  1. Bing Shi
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Xiao Li
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Bing Shi .

Editor information

Editors and Affiliations

  1. Aristotle University of Thessaloniki, Thessaloniki, Greece

    Nick Bassiliades

  2. Technical University of Crete, Chania, Greece

    Georgios Chalkiadakis

  3. IIIA-CSIC, Bellaterra, Spain

    Dave de Jonge

Rights and permissions

Reprints and permissions

Copyright information

© 2020 Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Shi, B., Li, X. (2020). A Game-Theoretical Analysis of Charging Strategies for Competing Double Auction Marketplaces. In: Bassiliades, N., Chalkiadakis, G., de Jonge, D. (eds) Multi-Agent Systems and Agreement Technologies. EUMAS AT 2020 2020. Lecture Notes in Computer Science(), vol 12520. Springer, Cham. https://doi.org/10.1007/978-3-030-66412-1_7

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-66412-1_7

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-66411-4

  • Online ISBN: 978-3-030-66412-1

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation