Evolved hybrid auction mechanisms in non-ZIP trader marketplaces

Abstract

A previous paper by D. Cliff (see ibid., 2002) demonstrated that a genetic algorithm could be used to automatically discover new optimal auction mechanisms for automated electronic marketplaces populated by software-agent traders. Significantly, the new auction mechanisms are often unlike traditional mechanisms designed by humans for human traders; rather, they are peculiar hybrid mixtures of established styles of mechanism. This previous work used software agents running the ZIP trader algorithm (recently shown to outperform human traders). We provide the first demonstration that qualitatively similar results (i.e., non-standard hybrid mechanism designs being optimal) are also given when similar experiments are performed using a different trader algorithm, namely Gode & Sunder's (1993) ZI-C traders. Thus, the paper is the first to offer significant evidence that evolved hybrid auction mechanisms may be found that out-perform traditional market mechanisms for many styles of trader-agent.