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Incentive Ratios of Fisher Markets

  • Ning Chen
  • Xiaotie Deng
  • Hongyang Zhang
  • Jie Zhang
Part of the Lecture Notes in Computer Science book series (LNCS, volume 7392)

Abstract

In a Fisher market, a market maker sells m items to n potential buyers. The buyers submit their utility functions and money endowments to the market maker, who, upon receiving submitted information, derives market equilibrium prices and allocations of its items. While agents may benefit by misreporting their private information, we show that the percentage of improvement by a unilateral strategic play, called incentive ratio, is rather limited—it is less than 2 for linear markets and at most \(e^{1/e}\thickapprox 1.445\) for Cobb-Douglas markets. We further prove that both ratios are tight.

Keywords

Utility Function Equilibrium Price Market Equilibrium Market Maker Fisher Market 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • Ning Chen
    • 1
  • Xiaotie Deng
    • 2
  • Hongyang Zhang
    • 3
  • Jie Zhang
    • 4
  1. 1.Division of Mathematical SciencesNanyang Technological UniversitySingapore
  2. 2.Department of Computer ScienceUniversity of LiverpoolUK
  3. 3.Department of Computer ScienceShanghai Jiao Tong UniversityChina
  4. 4.Department of Computer ScienceAarhus UniversityDenmark

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