Efficiency loss in a class of two-sided market mechanisms

Abstract

This thesis addresses the question of how to efficiently allocate resources among competing players in convex environments. We will analyze the efficiency loss of certain two-sided market mechanisms involving both consumers and suppliers that are natural extensions of Johari's thesis. After gaining intuition about the mechanisms, we show that their worst case efficiency loss approaches 100%. We then introduce some supply-side market mechanisms in a network setting. In the market mechanisms we study, every player submits a bid which specifies a demand or supply function from a parameterized family. Then, the mechanism allocates resources so that supply meets demand.