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Abstract
One-sided auctions are used for trading perishable agricultural commodities because
their production cost is already "sunk." Moreover, the promptness and simplicity of onesided
auctions are beneficial for trading in perishable commodities. However, sellers
cannot participate in the price-making process in these auctions. A standard double
auction market collects bids from both sides of traders and matches them to find the most
efficient allocation, assuming that the value of unsold items remains unchanged.
Nevertheless, in the market for perishable commodities, sellers suffer a loss when they fail
to sell their commodities, because their salvage values are lost when the commodities
perish without being sold. To solve this problem, we investigate the design of an online
double auction for perishable commodities, where bids arrive dynamically with their time
limits. Our market mechanism aims at improving the profitability of traders by reducing
trade failures in the face of uncertainty of incoming/departing bids.