Developing Online Double Auction Mechanism for Fishery Markets

In spot markets for trading fishes, single-sided auctions are used for clearing the market by virtue of its promptness and simplicity, which are important in dealing with perishable goods. However, in those auctions, sellers cannot participate in price-making process. A standard double auction market collects bids from traders and matches buyers’ higher bids and sellers’ lower bids to find the most efficient allocation, assuming that values of unsold items remain unchanged. Nevertheless, in the spot fish market, sellers suffer loss when they fail to sell the fish, whose salvage value is lost due to perishability. To solve the problem, we investigate the suitable design of an online double auction for fishery markets, where bids arrive dynamically with their time limits. Our market mechanism aims at improving traders’ profitability by reducing trade failures in the face of uncertainty of incoming/leaving bids. We developed a heuristic matching rule for the market to prioritize traders’ bids based on their time-criticality and evaluated its performance empirically.