2 Search Results for "Budish, Eric"


Document
Batching Trades on Automated Market Makers

Authors: Andrea Canidio and Robin Fritsch

Published in: LIPIcs, Volume 282, 5th Conference on Advances in Financial Technologies (AFT 2023)


Abstract
We consider an automated market maker (AMM) in which all trades are batched and executed at a price equal to the marginal price (i.e., the price of an arbitrarily small trade) after the batch trades. We show that such an AMM is a function maximizing AMM (or FM-AMM): for given prices, it trades to reach the highest possible value of a given function. Competition between arbitrageurs guarantees that an FM-AMM always trades at a fair, equilibrium price, and arbitrage profits (also known as LVR) are eliminated. Sandwich attacks are also eliminated because all trades occur at the exogenously-determined equilibrium price. Finally, we show that our results are robust to the case where the batch has exclusive access to the FM-AMM, but can also trade on a traditional constant function AMM.

Cite as

Andrea Canidio and Robin Fritsch. Batching Trades on Automated Market Makers. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 24:1-24:17, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)


Copy BibTex To Clipboard

@InProceedings{canidio_et_al:LIPIcs.AFT.2023.24,
  author =	{Canidio, Andrea and Fritsch, Robin},
  title =	{{Batching Trades on Automated Market Makers}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{24:1--24:17},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-303-4},
  ISSN =	{1868-8969},
  year =	{2023},
  volume =	{282},
  editor =	{Bonneau, Joseph and Weinberg, S. Matthew},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops-dev.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2023.24},
  URN =		{urn:nbn:de:0030-drops-192139},
  doi =		{10.4230/LIPIcs.AFT.2023.24},
  annote =	{Keywords: Arbitrage profits, Loss-vs-Rebalancing (LVR), MEV, Sandwich attacks, AMM, Mechanism design, Batch trading}
}
Document
Strategic Behavior in Multi-unit Assignment Problems: Theory and Evidence from Course Allocations

Authors: Eric Budish and Estelle Cantillon

Published in: Dagstuhl Seminar Proceedings, Volume 7271, Computational Social Systems and the Internet (2007)


Abstract
This paper analyses the assignment problem when agents have multi-unit demand. Applications include task assignment in a team, course allocation, sport drafts and any other allocation problem where money does not play a role in balancing supply and demand. There is no known allocation mechanism that is ex-post efficient, strategyproof and minimally fair, and practical solutions must therefore trade off these different aspects. We study such a specific mechanism used at Harvard Business School to allocate courses to students. We argue that students in the HBS mechanism have an incentive to overreport their preferences for popular courses, that this incentive does not vanish with the size of the market and that it results in increased congestion. We confirm these predictions with detailed data on reported preferences and behavior in the HBS mechanism. We show that strategic behavior hurts students but that it might still be preferable to random serial dictatorship over course bundles, a strategyproof alternative.

Cite as

Eric Budish and Estelle Cantillon. Strategic Behavior in Multi-unit Assignment Problems: Theory and Evidence from Course Allocations. In Computational Social Systems and the Internet. Dagstuhl Seminar Proceedings, Volume 7271, p. 1, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2007)


Copy BibTex To Clipboard

@InProceedings{budish_et_al:DagSemProc.07271.15,
  author =	{Budish, Eric and Cantillon, Estelle},
  title =	{{Strategic Behavior in Multi-unit Assignment Problems: Theory and Evidence from Course Allocations}},
  booktitle =	{Computational Social Systems and the Internet},
  pages =	{1--1},
  series =	{Dagstuhl Seminar Proceedings (DagSemProc)},
  ISSN =	{1862-4405},
  year =	{2007},
  volume =	{7271},
  editor =	{Peter Cramton and Rudolf M\"{u}ller and Eva Tardos and Moshe Tennenholtz},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops-dev.dagstuhl.de/entities/document/10.4230/DagSemProc.07271.15},
  URN =		{urn:nbn:de:0030-drops-11544},
  doi =		{10.4230/DagSemProc.07271.15},
  annote =	{Keywords: Course allocation, market design, assignment, multi-unit demand}
}
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