Computer Science > Computer Science and Game Theory
arXiv:2412.13972 (cs)
[Submitted on 18 Dec 2024 (v1), last revised 28 Jan 2025 (this version, v2)]
Title:Decentralized Convergence to Equilibrium Prices in Trading Networks
Authors:Edwin Lock,Benjamin Patrick Evans,Eleonora Kreacic,Sujay Bhatt,Alec Koppel,Sumitra Ganesh,Paul W. Goldberg
View a PDF of the paper titled Decentralized Convergence to Equilibrium Prices in Trading Networks, by Edwin Lock and 6 other authors
View PDFHTML (experimental)Abstract:We propose a decentralized market model in which agents can negotiate bilateral contracts. This builds on a similar, but centralized, model of trading networks introduced by Hatfield et al. in 2013. Prior work has established that fully-substitutable preferences guarantee the existence of competitive equilibria which can be centrally computed. Our motivation comes from the fact that prices in markets such as over-the-counter markets and used car markets arise from decentralized negotiation among agents, which has left open an important question as to whether equilibrium prices can emerge from agent-to-agent bilateral negotiations. We design a best response dynamic intended to capture such negotiations between market participants. We assume fully substitutable preferences for market participants. In this setting, we provide proofs of convergence for sparse markets (covering many real world markets of interest), and experimental results for more general cases, demonstrating that prices indeed reach equilibrium, quickly, via bilateral negotiations. Our best response dynamic, and its convergence behavior, forms an important first step in understanding how decentralized markets reach, and retain, equilibrium.
| Comments: | Extended version of paper accepted at AAAI'25 |
| Subjects: | Computer Science and Game Theory (cs.GT); Multiagent Systems (cs.MA) |
| Cite as: | arXiv:2412.13972 [cs.GT] |
| (orarXiv:2412.13972v2 [cs.GT] for this version) | |
| https://doi.org/10.48550/arXiv.2412.13972 arXiv-issued DOI via DataCite |
Submission history
From: Edwin Lock [view email][v1] Wed, 18 Dec 2024 15:49:13 UTC (2,058 KB)
[v2] Tue, 28 Jan 2025 10:42:39 UTC (3,274 KB)
Full-text links:
Access Paper:
- View PDF
- HTML (experimental)
- TeX Source
- Other Formats
View a PDF of the paper titled Decentralized Convergence to Equilibrium Prices in Trading Networks, by Edwin Lock and 6 other authors
References & Citations
Bookmark
Bibliographic and Citation Tools
Bibliographic Explorer(What is the Explorer?)
Connected Papers(What is Connected Papers?)
Litmaps(What is Litmaps?)
scite Smart Citations(What are Smart Citations?)
Code, Data and Media Associated with this Article
alphaXiv(What is alphaXiv?)
CatalyzeX Code Finder for Papers(What is CatalyzeX?)
DagsHub(What is DagsHub?)
Gotit.pub(What is GotitPub?)
Hugging Face(What is Huggingface?)
Papers with Code(What is Papers with Code?)
ScienceCast(What is ScienceCast?)
Demos
Recommenders and Search Tools
Influence Flower(What are Influence Flowers?)
CORE Recommender(What is CORE?)
arXivLabs: experimental projects with community collaborators
arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website.
Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them.
Have an idea for a project that will add value for arXiv's community?Learn more about arXivLabs.