Double-Auction Mechanisms for Resource Trading Market
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We consider a double-auction mechanism, which was recently proposed in the context of a mobile data-offloading market. It is also applicable in a network slicing market. Network operators (users) derive benefit from offloading their traffic to third party WiFi or femtocell networks (link-suppliers). Link-suppliers experience costs for the additional capacity that they provide. Users and link-suppliers (collectively referred to as agents) have their pay-offs and cost functions as private knowledge. A system-designer decomposes the problem into a network problem and agent problems. The surrogate pay-offs and cost functions are modulated by the agents' bids. Agents' payoffs and costs are then determined by the allocations and prices set by the system designer. Under this design, so long as the agents do not anticipate the effect of their actions, a competitive equilibrium exists as a solution to the network and agent problems, and this equilibrium optimizes the system utility. However, this design fails when the agents are strategic (price-anticipating). The presence of strategic supplying agents drives the system to an undesirable equilibrium with zero participation resulting in an efficiency loss of 100 This is in stark contrast to the setting when link-suppliers are not strategic: the efficiency loss is at most 34 paper then proposes a Stackelberg game modification with asymmetric information structures for suppliers and users in order to alleviate the efficiency loss problem. The system designer first announces the allocation and payment functions. He then invites the supplying agents to announce their bids, following which the users are invited to respond to the suppliers' bids. The resulting Stackelberg games' efficiency losses can be characterized in terms of the suppliers' cost functions when the user pay-off functions are linear.
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