Abstract
We study the robust double auction mechanisms, that is, the double auction mechanisms that satisfy dominant strategy incentive compatibility, ex-post individual rationality and ex-post budget balance. We first establish that the price in any robust mechanism does not depend on the valuations of the trading players. We next establish that, with a non-bossiness assumption, the price in any robust mechanism does not depend on players’ valuations at all, whether trading or non-trading. Our main result is the characterization result that, with a non-bossy assumption along with other assumptions on the properties of the mecha-nism, the generalized posted mechanism in which a constant price is posted for each possible set of traders is the only robust double auction mechanism.
| Original language | English |
|---|---|
| Pages (from-to) | 36-49 |
| Number of pages | 14 |
| Journal | Journal of Economic Theory and Econometrics |
| Volume | 34 |
| Issue number | 4 |
| Publication status | Published - 2023 Dec |
Bibliographical note
Publisher Copyright:© 2023, Korean Econometric Society. All rights reserved.
Keywords
- Double auction
- budget balance
- dominant strategy
- posted price
- robust mechanism design
ASJC Scopus subject areas
- Economics and Econometrics