Flexible double auctions for electronic commerce: theory and implementation

We consider a general family of auction mechanisms that admit multiple buyers and sellers, and determine market-clearing prices. We analyze the economic incentives facing participants in such auctions, demonstrating that, under some conditions, it is possible to induce truthful revelation of values by buyers or sellers, but not both, and for single- but not multi-unit bids. We also perform a computational analysis of the auctioneer's task, exhibiting efficient algorithms for processing bids and calculating allocations. (C) 1998 Elsevier Science B.V. All rights reserved.