Downward Bidding Dynamics
It is worth stating explicitly the actual bidding protocol, and noting
how a slight parametrization of it may provide for rather general trading
The Fishmarket uses a specific downward-bidding
protocol (DBP). In FM96.5,
our current implementation, it was implemented as follows:
- [Step 1]
- The auctioneer chooses a good out of a lot of goods that
is sorted according to the order in which sellers deliver their goods to the
- [Step 2]
- With a chosen good $g$, the auctioneer opens a
bidding round by
quoting offers downward from the good's starting price,
previously fixed by the sellers' admitter, as long as these price quotations
are above a reserve price previously set by the
- [Step 3]
- For each price called by the auctioneer, several
situations might arise during the open round:
- Multiple bids:
- Several buyers submit their bids at the current
price. In this case, a collision comes about, the good is not sold to
any buyer, and the auctioneer restarts the round at a higher price.
Nevertheless, the auctioneer tracks whether a given number of
successive collisions is reached, in order to
avoid an infinite collision loop. This loop is broken by randomly
selecting one buyer out of the set of colliding bidders.
- One bid:
- Only one buyer submits a
bid at the current price. The good is sold to this buyer whenever his
credit can support his bid. Whenever there is an unsupported bid the
round is restarted by the auctioneer at a higher price, the
unsuccessful bidder is punished with a fine, and
he is expelled out of the auction room unless such fine is paid off.
- No bids:
- No buyer submits a bid at the current price. If the
reserve price has not been reached yet, the auctioneer quotes a new
price which is obtained by decreasing the current price according to
the price step. If the reserve price is reached, the auctioneer
declares the good withdrawn(i.e.the
good is returned to its owner) and closes the round.
- [Step 4]
- The first three steps repeat until there are no more goods left.
Notice that six parameters that control the dynamics of the bidding process
are implicit in this protocol definition. We shall enumerate them now,
and require that they become instantiated as part of a tournament definition.
Hence the following:
||Price Step. Increment or decrement of price between two consecutive
offers shouted out by the auctioneer
||Minimum time between offers. Delay between consecutive offers.
||Minimum time between rounds. Delay between the end of a round
and the beginning of the next round.
||Maximum number of successive collisions. The auctioneer randomly
chooses one buyer out of the set of bidders when the maximum number of
successive collisions is reached.
||Sanction factor. This coefficient is utilized by the buyers'
manager to calculate the amount of the sanction to be imposed on buyers
submitting unsupported bids.
||Price increment. This value determines how the new offer is
calculated by the auctioneer from the current offer when either a collision,
a fine or an expulsion occur.
This set of parameters is what we call the Downward bidding protocol
(DBP) dynamics descriptor. Our first tournament will instantiate the
DBP dynamics descriptor as follows.
Updated: April, 29th 1998
IIIA | IIIA
Fishmarket Project ]