Online Market Intermediation

DOI10.4230/LIPICS.ICALP.2017.47zbMATH Open1447.91072arXiv1703.09279OpenAlexW2603374814MaRDI QIDQ5111378FDOQ5111378

Elias Koutsoupias, Yiannis Giannakopoulos, Philip Lazos

Publication date: 27 May 2020

Abstract: We study a dynamic market setting where an intermediary interacts with an unknown large sequence of agents that can be either sellers or buyers: their identities, as well as the sequence length $n$, are decided in an adversarial, online way. Each agent is interested in trading a single item, and all items in the market are identical. The intermediary has some prior, incomplete knowledge of the agents' values for the items: all seller values are independently drawn from the same distribution $F_S$, and all buyer values from $F_B$. The two distributions may differ, and we make standard regularity assumptions, namely that $F_B$ is MHR and $F_S$ is log-concave. We study online, posted-price mechanisms, and analyse two objectives: that of maximizing the intermediary's profit and that of maximizing the social welfare, under a competitive analysis benchmark. First, on the negative side, for general agent sequences we prove tight competitive ratios of $varTheta(sqrtn)$ and $varTheta(lnn)$, respectively for the two objectives. On the other hand, under the extra assumption that the intermediary knows some bound $alpha$ on the ratio between the number of sellers and buyers, we design asymptotically optimal online mechanisms with competitive ratios of $1+o(1)$ and $4$, respectively. Additionally, we study the model were the number of items that can be stored in stock throughout the execution is bounded, in which case the competitive ratio for the profit is improved to $O(lnn)$.

Full work available at URL: https://arxiv.org/abs/1703.09279

zbMATH Keywords

online algorithmscompetitive analysisbilateral tradesequential auctionsoptimal auctions

Mathematics Subject Classification ID

Online algorithms; streaming algorithms (68W27) Auctions, bargaining, bidding and selling, and other market models (91B26)

Cited In (5)

• Dual mechanism for an online retailer
• Algorithms for maximum social welfare of online random trading
• Market segmentation in online platforms
• Title not available (Why is that?)
• Optimal pricing for MHR distributions

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