2 Search Results for "Pennock, David"

Document
DOI: 10.4230/LIPIcs.ITCS.2024.51
An Axiomatic Characterization of CFMMs and Equivalence to Prediction Markets

Authors: Rafael Frongillo, Maneesha Papireddygari, and Bo Waggoner

Published in: LIPIcs, Volume 287, 15th Innovations in Theoretical Computer Science Conference (ITCS 2024)

Abstract
Constant-function market makers (CFMMs), such as Uniswap, are automated exchanges offering trades among a set of assets. We study their technical relationship to another class of automated market makers, cost-function prediction markets. We first introduce axioms for market makers and show that CFMMs with concave potential functions characterize "good" market makers according to these axioms. We then show that every such CFMM on n assets is equivalent to a cost-function prediction market for events with n outcomes. Our construction directly converts a CFMM into a prediction market, and vice versa. Using this equivalence, we give another construction which can produce any 1-homogenous, increasing, and concave CFMM, as are typically used in practice, from a cost function. Conceptually, our results show that desirable market-making axioms are equivalent to desirable information-elicitation axioms, i.e., markets are good at facilitating trade if and only if they are good at revealing beliefs. For example, we show that every CFMM implicitly defines a proper scoring rule for eliciting beliefs; the scoring rule for Uniswap is unusual, but known. From a technical standpoint, our results show how tools for prediction markets and CFMMs can interoperate. We illustrate this interoperability by showing how liquidity strategies from both literatures transfer to the other, yielding new market designs.
Cite as

Rafael Frongillo, Maneesha Papireddygari, and Bo Waggoner. An Axiomatic Characterization of CFMMs and Equivalence to Prediction Markets. In 15th Innovations in Theoretical Computer Science Conference (ITCS 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 287, pp. 51:1-51:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{frongillo_et_al:LIPIcs.ITCS.2024.51,
  author =	{Frongillo, Rafael and Papireddygari, Maneesha and Waggoner, Bo},
  title =	{{An Axiomatic Characterization of CFMMs and Equivalence to Prediction Markets}},
  booktitle =	{15th Innovations in Theoretical Computer Science Conference (ITCS 2024)},
  pages =	{51:1--51:21},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-309-6},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{287},
  editor =	{Guruswami, Venkatesan},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ITCS.2024.51},
  URN =		{urn:nbn:de:0030-drops-195795},
  doi =		{10.4230/LIPIcs.ITCS.2024.51},
  annote =	{Keywords: Convex analysis, Equivalence result, Axiomatic characterization, Market Makers, Prediction markets, Scoring rules, Cost-functions}
}
Document
DOI: 10.4230/DagRep.12.7.1
Algorithms for Participatory Democracy (Dagstuhl Seminar 22271)

Authors: Markus Brill, Jiehua Chen, Andreas Darmann, David Pennock, and Matthias Greger

Published in: Dagstuhl Reports, Volume 12, Issue 7 (2023)

Abstract
Participatory democracy aims to make democratic processes more engaging and responsive by giving all citizens the opportunity to participate, and express their preferences, at many stages of decision-making processes beyond electing representatives. Recent years have witnessed an increasing interest in participatory democracy systems, enabled by modern information and communication technology. Participation at scale gives rise to a number of algorithmic challenges. In this seminar, we addressed these challenges by bringing together experts from computational social choice (COMSOC) and related fields. In particular, we studied algorithms for online decision-making platforms and for participatory budgeting processes. We also explored how innovations such as prediction markets, liquid democracy, quadratic voting, and blockchain can be employed to improve participatory decision-making systems.
Cite as

Markus Brill, Jiehua Chen, Andreas Darmann, David Pennock, and Matthias Greger. Algorithms for Participatory Democracy (Dagstuhl Seminar 22271). In Dagstuhl Reports, Volume 12, Issue 7, pp. 1-18, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@Article{brill_et_al:DagRep.12.7.1,
  author =	{Brill, Markus and Chen, Jiehua and Darmann, Andreas and Pennock, David and Greger, Matthias},
  title =	{{Algorithms for Participatory Democracy (Dagstuhl Seminar 22271)}},
  pages =	{1--18},
  journal =	{Dagstuhl Reports},
  ISSN =	{2192-5283},
  year =	{2023},
  volume =	{12},
  number =	{7},
  editor =	{Brill, Markus and Chen, Jiehua and Darmann, Andreas and Pennock, David and Greger, Matthias},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/DagRep.12.7.1},
  URN =		{urn:nbn:de:0030-drops-176096},
  doi =		{10.4230/DagRep.12.7.1},
  annote =	{Keywords: liquid democracy, participatory budgeting, social choice and currency, platforms for collective decision making}
}
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