Design of a multi-unit double auction E-market

We envision a future economy where e-markets will play an essential role as exchange hubs for commodities and services. Future e-markets should be designed to be robust to manipulation, flexible, and sufficiently efficient in facilitating exchanges. One of the most important aspects of designing an e-market is market mechanism design. A market mechanism defines the organization, information exchange process, trading procedure, and clearance rules of a market. If we view an e-market as a multi-agent system, the market mechanism also defines the structure and rules of the environment in which agents (buyers and sellers) play the market game, We design an c-market mechanism that is strategy-proof with respect to reservation price, weakly budget-balanced, and individually rational. Our mechanism also makes sellers unlikely to underreport the supply volume to drive LIP the market price. In addition, by bounding our market's efficiency loss, we provide fairly unrestrictive sufficient conditions for the efficiency of our mechanism to converge in a strong sense,,hen (1) the number of agents who trade is large, or (2) the number of agents, trading and not, is large. We implement our design using the RETSINA infrastructure, a multi-agent system development toolkit. This enables us to validate our analytically derived bounds by numerically testing our e-market.