Secure Computing, Economy, and Trust: A Generic Solution for Secure Auctions with Real-World Applications

In this paper we consider the problem of constructing secure auctions based on techniques from modern cryptography. We combine knowledge from economics, cryptography and security engineering and develop and implement secure auctions for practical real-world problems. In essence this paper is an overview of the research project SCET--Secure Computing, Economy, and Trust-- which attempts to build auctions for real applications using secure multiparty computation. The main contributions of this project are: A generic setup for secure evaluation of integer arithmetic including comparisons; general double auctions expressed by such operations; a real world double auction tailored to the complexity and performance of the basic primitives '+' and

Integration of Blockchain and Auction Models: A Survey, Some Applications, and Challenges

In recent years, blockchain has gained widespread attention as an emerging technology for decentralization, transparency, and immutability in advancing online activities over public networks. As an essential market process, auctions have been well studied and applied in many business fields due to their efficiency and contributions to fair trade. Complementary features between blockchain and auction models trigger a great potential for research and innovation. On the one hand, the decentralized nature of blockchain can provide a trustworthy, secure, and cost-effective mechanism to manage the auction process; on the other hand, auction models can be utilized to design incentive and consensus protocols in blockchain architectures. These opportunities have attracted enormous research and innovation activities in both academia and industry; however, there is a lack of an in-depth review of existing solutions and achievements. In this paper, we conduct a comprehensive state-of-the-art survey of these two research topics. We review the existing solutions for integrating blockchain and auction models, with some application-oriented taxonomies generated. Additionally, we highlight some open research challenges and future directions towards integrated blockchain-auction models

Design for Optimized Multi-Lateral Multi-Commodity Markets

In this paper, we propose a design for an an economically efficient, optimized, centralized, multi-lateral, periodic commodity market that addresses explicitly three issues: (i) substantial transportation costs between sellers and buyers; (ii) non homogeneous, in quality and nature, commodities; (iii) complementary commodities that have to be traded simultaneously. The model allows sellers to offer their commodities in lots and buyers to explicitly quantify the differences in quality of the goods produced by each individual seller. The model does not presume that products must be shipped through a market hub. We also propose a multi-round auction that enables the implementation of the direct optimized market and approximates the behaviour of the "ideal" direct optimized mechanism. The process allows buyers and sellers to modify their initial bids, including the technological constraints. The proposed market designs are particularly relevant for industries related to natural resources. We present the models and algorithms required to implement the optimized market mechanisms, describe the operations of the multi-round auction, and discuss applications and perspectives. Nous présentons un concept de marché optimisé, centralisé, multilatéral et périodique pour l'acquisition de produits qui traite explicitement les trois aspects suivants: (i) des coûts de transport importants des vendeurs vers les acheteurs; (ii) des produits non homogènes en valeur et qualité; des complémentarités entre les divers produits qui doivent donc être négociés simultanément. Le modèle permet aux vendeurs d'offrir leurs produits groupés en lots et aux acheteurs de quantifier explicitement leur évaluation des lots mis sur le marché par chaque vendeur. Le modèle ne suppose pas que les produits doivent être expédiés par un centre avant d'être livrés. Nous proposons également un mécanisme de tâtonnement à rondes multiples qui approxime le comportement du marché direct optimisé et qui permet de mettre ce dernier en oeuvre. Le processus de tâtonnement permet aux vendeurs et aux acheteurs de modifier leurs mises initiales, incluant les contraintes technologiques. Les concepts proposés sont particulièrement adaptés aux industries reliées aux matières premières. Nous présentons les modèles et algorithmes requis à la mise en oeuvre du marché multi-latéral optimisé, nous décrivons le fonctionnement du processus de tâtonnement, et nous discutons les applications et perspectives reliées à ces mécanismes de marché.Market design, optimized multi-lateral multi-commodity markets, multi-round auctions, Design de marché, marché multi-latéraux optimisés, processus de tâtonnement

Auctions and bidding: A guide for computer scientists

There is a veritable menagerie of auctions-single-dimensional, multi-dimensional, single-sided, double-sided, first-price, second-price, English, Dutch, Japanese, sealed-bid-and these have been extensively discussed and analyzed in the economics literature. The main purpose of this article is to survey this literature from a computer science perspective, primarily from the viewpoint of computer scientists who are interested in learning about auction theory, and to provide pointers into the economics literature for those who want a deeper technical understanding. In addition, since auctions are an increasingly important topic in computer science, we also look at work on auctions from the computer science literature. Overall, our aim is to identifying what both these bodies of work these tell us about creating electronic auctions. © 2011 ACM.This work was funded in part by HP under the “Always on” grant, by NSF IIS-0329037 “Tools and Techniques for Automated Mechanism Design”, and by IEA (TIN2006-15662-C02-01), OK (IST-4-027253-STP), eREP(EC-FP6-CIT5-28575) and Agreement Technologies (CONSOLIDER CSD2007-0022, INGENIO 2010).Peer Reviewe

Achieving Trust without Disclosure: Dark Pools and a Role for Secrecy-Preserving Verification

Can an exchange be “dark,” so that orders are not displayed, while simultaneously trustworthy, so that the execution of trades and flow of information occur as promised? SEC actions against dark pools suggest cause for concern, and regulators seem to be moving towards requiring more disclosure. Yet there is a clear tension: trading order information is widely exploited. Therefore, institutional investors have a strong interest in keeping pre-trade information about large trades hidden. Secrecy-preserving proofs of correctness can be used to build trust without revealing unnecessary information. By performing operations on obfuscated representations of orders (perhaps encrypted or otherwise hidden), a zero knowledge proof can be provided, allowing anyone to verify correctness of trades. Crucially, this can be done without revealing any information beyond this correctness. This technology can be usefully applied to construct provably trustworthy dark pools. Additional practical protocols relax the definition of “zero knowledge" to reveal limited information, providing necessary transparency for efficient market operation while limiting information that can be exploited by observers. Coupled with Trusted Computing hardware, these protocols can provide an excellent balance of practicality with secrecyEngineering and Applied Science

Intraday Markets for Power: Discretizing the Continuous Trading

A fundamental question regarding the design of electricity markets is whether adding auctions to the continuous intraday trading is improving the performance of the market. To approach this question, we assess the experience with the implementation of the 3 pm local auction for quarters in Germany at the European Power Exchange (EPEX SPOT) in December 2014 to assess the impact on trading volumes/liquidity, prices, as well as market depth. We discuss further opportunities and challenges that are linked with a potential implementation of an intraday auction

A Free Exchange e-Marketplace for Digital Services

The digital era is witnessing a remarkable evolution of digital services. While the prospects are countless, the e-marketplaces of digital services are encountering inherent game-theoretic and computational challenges that restrict the rational choices of bidders. Our work examines the limited bidding scope and the inefficiencies of present exchange e-marketplaces. To meet challenges, a free exchange e-marketplace is proposed that follows the free market economy. The free exchange model includes a new bidding language and a double auction mechanism. The rule-based bidding language enables the flexible expression of preferences and strategic conduct. The bidding message holds the attribute-valuations and bidding rules of the selected services. The free exchange deliberates on attributes and logical bidding rules for automatic deduction and formation of elicited services and bids that result in a more rapid self-managed multiple exchange trades. The double auction uses forward and reverse generalized second price auctions for the symmetric matching of multiple digital services of identical attributes and different quality levels. The proposed double auction uses tractable heuristics that secure exchange profitability, improve truthful bidding and deliver stable social efficiency. While the strongest properties of symmetric exchanges are unfeasible game-theoretically, the free exchange converges rapidly to the social efficiency, Nash truthful stability, and weak budget balance by multiple quality-levels cross-matching, constant learning and informs at repetitive thick trades. The empirical findings validate the soundness and viability of the free exchange