Tech Reports

ULCS-02-019

Co-evolutionary Auction Mechanism Design: A Preliminary Report

Steve Phelps, Peter McBurney, Simon Parsons and Elizabeth Sklar

Abstract

Auctions can be thought of as resource allocation mechanisms. The economic theory behind such systems is mechanism design. Traditionally, economists have approached design problems by studying the analytic properties of different mechanisms. An alternative is to view a mechanism as the outcome of some evolutionary process involving buyers, sellers and an auctioneer. As a first step in this alternative direction, we have applied genetic programming to the development of an auction pricing rule for double auctions in a wholesale electricity marketplace.

Keywords: Auction mechanisms; Evolutionary computation; Market design; Multi-agent systems (MAS); Resource allocation; Trading strategies.

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