Instructions

This page demonstrates the market mechanism described in Lindsay (2018). A number of traders each submit one or more bids. The mechanism determines which bids are winning and the payment for each trader.

Number of goods is the number of different types of good being traded. Money is counted as one of the goods. For example, in a market where apples and bananas are bought and sold using money, the number of goods would be 3.

Bids specify what each trader is offering. Each row is a different trader. An example of the syntax for the bids in a market with 3 goods (say, money, apples and bananas) is as follows.

seller 1: -10 1 0, -15 1 1

First the trader's name is stated followed by a colon (:). This part is optional. If it is omitted generic names will be generated. Then there is a list of bids. Each trader can submit several bids. XOR bids are separated by commas and OR bids by "|" symbols. Each bid is a space-separated list of values. The number of values must match the previously specified number of goods. Positive values indicate giving and negative ones taking. The first entry is money and the remaining ones are the other goods. In this example, the first bid

-10 1 0

demands 10 cash and offers 1 apple and zero bananas.

The payment for a winning bid will never exceed the amount specified in the bid. By default, each bid is treated as an indivisible package. If the bid is winning, for each good except money, the exact quantity specified in the bid will be traded. However, bids can be declared as divisible by preceding the list of values with a "d", e.g:

seller: d -20 2 0

In this case, the seller is offering two units for 20, but since the bid is divisible, would accept 10 for one unit or 5 for half a unit.

Pricing rule specifies how the payments for winning bids will be determined. The options are "lindsay2018" (Shapley value based pricing as described by Lindsay (2018)), "vcg" (Vickrey–Clarke–Groves) and "pab" (pay-as-bid).

Free disposal indicates whether unwanted goods can be freely discarded when determining the winning bids. Whether this is appropriate will depend on the context, e.g. disposing of oil is costly but leaving a train seat empty is not.

Examples

Some examples discussed in Lindsay (2018) are shown below. To run them, copy and paste the bids into the form.

Buyer and seller (2 goods)

Seller: -10 1
Buyer L: 22 -1
Buyer H: 26 -1

Two demand types and no competitive equilibrium

Airline: 0 1 1, 0 1 0, 0 0 1
Tourist: 90 -1 -1
Co-authors: 60 -1 0, 60 0 -1

Avoidable fixed costs and empty core

Small airline: -85 1, -85 2
Large airline: -150 1, -150 2, -150 3
Traveler 1: 55 -1
Traveler 2: 60 -1
Traveler 3: 70 -1

Low VCG revenue with 3 buyers

Airline: 0 1, 0 2
Couple: 2 -2
Single traveler 1: 2 -1
Single traveler 2: 2 -1

Other examples

Diamond market

The diamond cutter converts rough diamonds into polished diamonds.

Diamond miner 1: -20 1 0
Diamond miner 2: -40 1 0
Diamond miner 3: -60 1 0
Diamond cutter: -3 -2 1, -5 -3 2
Jeweller 1: 50 0 -1
Jeweller 2: 60 0 -1
Jeweller 3: 70 0 -1