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Automated Trading in Agents-based Markets for Communication Bandwidth
Vulkan, Nir; Preist, Chris
HPL-2000-24
Keyword(s): electronic commerce; internet auctions; electronic data submissions
Abstract: Automated agents are increasingly being used by organisations and individuals trading in electronic markets. Agents are particularly useful in markets where trade might not have been possible otherwise, for example because a lot of information must be processed quickly, or because employing human traders in 24-hour, small transactions markets is not cost- effective. Markets for communication bandwidth, where organisations trade the rights to transmit data over a network, are one such application. Because demand fluctuates considerably every few seconds agent-based spot markets provide extra liquidity. This paper considers the design of agents which automatically trade in a k-double auction market for communication bandwidth. We suggest criteria and a general framework for building adaptive agents based on ideas from statistical decision theory. In particular our agents are designed to differentiate stable from unstable market conditions and to best-respond to these changes. Notes: Department of Economics, University of Bristol, 8 Woodland Road, Bristol BS8 1TN. E-mail: N.Vulkan@Bristol.ac.uk
28 Pages
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