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Summary: Truthful and Competitive Double Auctions
Kaustubh Deshmukh1
, Andrew V. Goldberg2
,
Jason D. Hartline1
, and Anna R. Karlin1
1
Computer Science Department, University of Washington. Supported in part by
NSF grant CCR-0105406. {kd,hartline,karlin}@cs.washington.edu
2
Microsoft Research, 1065 La Avenida, SVC 5, Mountain View, CA 94043.
goldberg@microsoft.com
Abstract In this paper we consider the problem of designing a mecha-
nism for double auctions where bidders each bid to buy or sell one unit
of a single commodity. We assume that each bidder's utility value for
the item is private to them and we focus on truthful mechanisms, ones
where the bidders' optimal strategy is to bid their true utility. The profit
of the auctioneer is the difference between the total payments from buy-
ers and the total payments to the sellers. We aim to maximize this profit.
We extend the competitive analysis framework of basic auctions [12] and
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