A Scalar-Parameterized Mechanism for Two-Sided Markets

Mariola Ndrio, Khaled Alshehri, Subhonmesh Bose

Research output: Contribution to journalConference articlepeer-review


We consider a market in which both suppliers and consumers compete for a product via scalar-parameterized supply offers and demand bids. Scalar-parameterized offers/bids are appealing due to their modeling simplicity and desirable mathematical properties with the most prominent being bounded efficiency loss and price markup under strategic interactions. Our model incorporates production capacity constraints and minimum inelastic demand requirements. Under perfect competition, the market mechanism yields allocations that maximize social welfare. When market participants are price-anticipating, we show that there exists a unique Nash equilibrium, and provide an efficient way to compute the resulting market allocation. Moreover, we explicitly characterize the bounds on the welfare loss and prices observed at the Nash equilibrium.

Original languageEnglish (US)
Pages (from-to)16952-16957
Number of pages6
Issue number2
StatePublished - 2020
Event21st IFAC World Congress 2020 - Berlin, Germany
Duration: Jul 12 2020Jul 17 2020


  • Game Theory
  • Market Efficiency
  • Nash Equilibrium
  • Scalar-Parameterized Offers/Bids

ASJC Scopus subject areas

  • Control and Systems Engineering

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