Evolutionary auction design for agent-based marketplaces

Market mechanism or auction design research is playing an important role in computational economics for resolving multi-agent allocation problems. In this chapter, we review relevant background of trading agents, and market designs by evolutionary computing methods. In particular, a genetic algorithm (GA) can be used to design auction mechanisms in order to automatically generate a desired market mechanism for electronic markets populated with trading agents. In previous research, an auction space model was studied, in which the probability that buyers and sellers are able to quote on a given time step is optimized by a simple GA in order to maximize the market efficiency in terms of Smith's coefficient of convergence. In this chapter, we also show some new results based on experiments with homogeneous and heterogeneous agents in a more realistic auction space model. This research provides a way of designing efficient auctions by evolutionary computing approaches.