We propose a simultaneous ascending auction mechanism for a producer-consumer economy. A producer-consumer economy comprises of producers, consumers and several types of items. Each producer can produce at most one unit of an item and each consumer wants to consume at most one unit of an item. Each producer's cost of producing each type of item and the valuations of these items by the consumers are private and known to them. For our mechanism we propose simple strategies for producers and consumers which if followed will lead to a nearly efficient allocation. We study the incentive properties of these strategies. Further we show, under certain conditions, if producers and consumers follow these strategies, final prices of our mechanism will converge close to a uniquely defined competitive equilibrium price.
By: Debasis Mishra, Rahul Garg, Dharmaraj Veeramani
Published in: RI02005 in 2002
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