Individual Rationality and Collective Rationality in Double Auction
Individual Rationality and Collective Rationality in Double Auction
Introduction
1. Introduction of Double Auction
As one of the most popular way to trade, auction has a long history. According to the different kinds of market structure, there are two kinds of auction, one-side auction and two-side auction (i.e. double auction). Compared with one-side auction, the market structure of the double auction is many-to-many, which means that there are more than one seller and more than one buyer, so both the buyers and sellers lose their own comparative advantage which exists in one-side auction. The relationship between them is a kind of equality between demand and supply.
In recent years, with the development of the global economy, there are more challenges for new auction theory and its applications, which are shown in the following aspects. First, with the development of the Internet and communication technologies, e-commerce has become a new business method. At the same time, internet auction has been widely used in the field of e-commerce. Since auction is widely used in the field of trading non-scarcity goods, it changes structure of auction, which used to be based on the buyer’s market or the seller’s market. As double auction can solve the problem of collusion and malignant bid, it has become a widely used way in e-commerce. For example, both NYSE and Chicago Exchange have put different kinds of double auction into practice. With the growing of financial market and e-commerce, the need for better auction rules is surely increasing. Besides, as enterprise restructuring has become a hot topic, double auction is found to be a way to deal with property transactions, mergers and acquisitions. What’s more, with the upgrade of demand structure, the diversification strategy for enterprise business and influence of the supply chain management, there are diversified production, diversified manufacturing and diversified demand. Many famous car companies such
Introduction
1. Introduction of Double Auction
As one of the most popular way to trade, auction has a long history. According to the different kinds of market structure, there are two kinds of auction, one-side auction and two-side auction (i.e. double auction). Compared with one-side auction, the market structure of the double auction is many-to-many, which means that there are more than one seller and more than one buyer, so both the buyers and sellers lose their own comparative advantage which exists in one-side auction. The relationship between them is a kind of equality between demand and supply.
In recent years, with the development of the global economy, there are more challenges for new auction theory and its applications, which are shown in the following aspects. First, with the development of the Internet and communication technologies, e-commerce has become a new business method. At the same time, internet auction has been widely used in the field of e-commerce. Since auction is widely used in the field of trading non-scarcity goods, it changes structure of auction, which used to be based on the buyer’s market or the seller’s market. As double auction can solve the problem of collusion and malignant bid, it has become a widely used way in e-commerce. For example, both NYSE and Chicago Exchange have put different kinds of double auction into practice. With the growing of financial market and e-commerce, the need for better auction rules is surely increasing. Besides, as enterprise restructuring has become a hot topic, double auction is found to be a way to deal with property transactions, mergers and acquisitions. What’s more, with the upgrade of demand structure, the diversification strategy for enterprise business and influence of the supply chain management, there are diversified production, diversified manufacturing and diversified demand. Many famous car companies such
References: 1. JAVIER GIL-BAZO, DAVID MORENO, AND MIKEL TAPIA, “Price Dynamics, Informational Efficiency, And Wealth Distribution in Continuous Double-Auction Markets”, Computational Intelligence, Volume 23, Number 2, 2007 2. Charles A.Holt, Loren W.Langan, Anne P.Villamil, "Market power in oral double auctions” Economic Inquiry, 24:1 (1986:Jan.) p.107 3. Juliette Rouchier, Stéphane Robin, “Simulation & Gaming” 4. Darren Duxbury, “Experimental Evidence on Trading Behavior, Market Efficiency and Price Formation in Double Auctions with Unknown Trading Duration”