# Market clearing price and equilibria of the progressive second price mechanism

RAIRO - Operations Research (2007)

- Volume: 41, Issue: 4, page 465-478
- ISSN: 0399-0559

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topMaillé, Patrick. "Market clearing price and equilibria of the progressive second price mechanism." RAIRO - Operations Research 41.4 (2007): 465-478. <http://eudml.org/doc/250102>.

@article{Maillé2007,

abstract = {
The Progressive Second Price mechanism (PSP), recently introduced by
Lazar and Semret to share an
infinitely-divisible resource among users through pricing, has been shown to verify
very interesting properties.
Indeed, the incentive compatibility
property of that scheme, and the convergence to
an efficient resource allocation where established, using the framework
of Game Theory.
Therefore, that auction-based allocation and pricing scheme seems
particularly well-suited to solve congestion problems in
telecommunication networks, where the resource to share is the
available bandwidth on a link.
This paper aims at
supplementing the existing results by highlighting some properties of the
different equilibria that can be reached.
We precisely characterize the possible outcomes of the
PSP auction game in terms of players bid price:
when the bid fee (cost of a bid update) tends to zero then the bid price of all users at equilibrium gets close to the so-called market clearing price of the resource. Therefore, observing an equilibrium of the PSP auction game gives some accurate information about the market clearing price of the resource.
},

author = {Maillé, Patrick},

journal = {RAIRO - Operations Research},

keywords = {Network pricing; Game theory; Auctions; network pricing; game theory; auctions},

language = {eng},

month = {10},

number = {4},

pages = {465-478},

publisher = {EDP Sciences},

title = {Market clearing price and equilibria of the progressive second price mechanism},

url = {http://eudml.org/doc/250102},

volume = {41},

year = {2007},

}

TY - JOUR

AU - Maillé, Patrick

TI - Market clearing price and equilibria of the progressive second price mechanism

JO - RAIRO - Operations Research

DA - 2007/10//

PB - EDP Sciences

VL - 41

IS - 4

SP - 465

EP - 478

AB -
The Progressive Second Price mechanism (PSP), recently introduced by
Lazar and Semret to share an
infinitely-divisible resource among users through pricing, has been shown to verify
very interesting properties.
Indeed, the incentive compatibility
property of that scheme, and the convergence to
an efficient resource allocation where established, using the framework
of Game Theory.
Therefore, that auction-based allocation and pricing scheme seems
particularly well-suited to solve congestion problems in
telecommunication networks, where the resource to share is the
available bandwidth on a link.
This paper aims at
supplementing the existing results by highlighting some properties of the
different equilibria that can be reached.
We precisely characterize the possible outcomes of the
PSP auction game in terms of players bid price:
when the bid fee (cost of a bid update) tends to zero then the bid price of all users at equilibrium gets close to the so-called market clearing price of the resource. Therefore, observing an equilibrium of the PSP auction game gives some accurate information about the market clearing price of the resource.

LA - eng

KW - Network pricing; Game theory; Auctions; network pricing; game theory; auctions

UR - http://eudml.org/doc/250102

ER -

## References

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