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Electronic markets with multiple submodular buyers

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  • Allan Borodin
  • Akash Rakheja

Abstract

We discuss the problem of setting prices in an electronic market that has more than one buyer. We assume that there are self-interested sellers each selling a distinct item that has an associated cost. Each buyer has a submodular valuation for purchasing any subset of items. The goal of the sellers is to set a price for their item such that their profit from possibly selling their item to the buyers is maximized. Our most comprehensive results concern a multi copy setting where each seller has m copies of their item and there are m buyers. In this setting, we give a necessary and sufficient condition for the existence of market clearing pure Nash equilibrium. We also show that not all equilibria are market clearing even when this condition is satisfied contrary to what was shown in the case of a single buyer in [2]. Finally, we investigate the pricing problem for multiple buyers in the limited supply setting when each seller only has a single copy of their item.

Suggested Citation

  • Allan Borodin & Akash Rakheja, 2019. "Electronic markets with multiple submodular buyers," Papers 1907.11915, arXiv.org, revised Sep 2019.
    • Handle: RePEc:arx:papers:1907.11915
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    References listed on IDEAS

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    1. William C. Brainard & Herbert E. Scarf, 2005. "How to Compute Equilibrium Prices in 1891," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(1), pages 57-83, January.
    2. Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
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