scholarly journals Use of Markov Chains to Design an Agent Bidding Strategy for Continuous Double Auctions

2004 ◽  
Vol 22 ◽  
pp. 175-214 ◽  
Author(s):  
S. Park ◽  
E. H. Durfee ◽  
W. P. Birmingham
Keyword(s):  
Time Horizon ◽  
Markov Chain Model ◽  
The Other ◽  
Bidding Strategy ◽  
Chain Model ◽  
Double Auctions ◽  
Continuous Double Auctions ◽  
Heuristic Strategies ◽  
Bid Price ◽  
New Strategy

As computational agents are developed for increasingly complicated e-commerce applications, the complexity of the decisions they face demands advances in artificial intelligence techniques. For example, an agent representing a seller in an auction should try to maximize the seller?s profit by reasoning about a variety of possibly uncertain pieces of information, such as the maximum prices various buyers might be willing to pay, the possible prices being offered by competing sellers, the rules by which the auction operates, the dynamic arrival and matching of offers to buy and sell, and so on. A naive application of multiagent reasoning techniques would require the seller?s agent to explicitly model all of the other agents through an extended time horizon, rendering the problem intractable for many realistically-sized problems. We have instead devised a new strategy that an agent can use to determine its bid price based on a more tractable Markov chain model of the auction process. We have experimentally identified the conditions under which our new strategy works well, as well as how well it works in comparison to the optimal performance the agent could have achieved had it known the future. Our results show that our new strategy in general performs well, outperforming other tractable heuristic strategies in a majority of experiments, and is particularly effective in a 'seller?s market', where many buy offers are available.

scholarly journals Overdominant Alleles in a Population of Variable Size

Genetics ◽  
1999 ◽  
Vol 152 (2) ◽  
pp. 775-781 ◽  
Author(s):  
Montgomery Slatkin ◽  
Christina A Muirhead
Keyword(s):  
Markov Chain ◽  
Approximate Method ◽  
Population Size ◽  
Transition Matrix ◽  
Markov Chain Model ◽  
Population Bottleneck ◽  
The Other ◽  
Chain Model ◽  
Variable Size ◽  
Constant Size

Abstract An approximate method is developed to predict the number of strongly overdominant alleles in a population of which the size varies with time. The approximation relies on the strong-selection weak-mutation (SSWM) method introduced by J. H. Gillespie and leads to a Markov chain model that describes the number of common alleles in the population. The parameters of the transition matrix of the Markov chain depend in a simple way on the population size. For a population of constant size, the Markov chain leads to results that are nearly the same as those of N. Takahata. The Markov chain allows the prediction of the numbers of common alleles during and after a population bottleneck and the numbers of alleles surviving from before a bottleneck. This method is also adapted to modeling the case in which there are two classes of alleles, with one class causing a reduction in fitness relative to the other class. Very slight selection against one class can strongly affect the relative frequencies of the two classes and the relative ages of alleles in each class.

scholarly journals A MARKOV CHAIN MODEL FOR ISLAMIC MICRO-FINANCING

2019 ◽  
Vol 5 (4) ◽  
pp. 763-784
Author(s):  
Djaffar Lessy ◽  
Fouad Khoudjeti ◽  
Marc Diener ◽  
Francine Diener
Keyword(s):  
Markov Chain ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Adverse Selection ◽  
Markov Chain Model ◽  
The Other ◽  
Chain Model ◽  
Business Sector ◽  
Islamic Banks ◽  
Strategic Default

            This paper introduces a Markov chain model for Islamic micro-financing, especially mudarabah  and murababah contract. Mudarabah and murabahah  are two Islamic micro-financing contracts that have enormous potential in creating a balance between the monetary and sharia sector because these two products are moving to manage the business sector which undoubtedly adds value to the economic movement directly.  On the other hand, these two contracts have the potential to cause problems in their implementation. The most common problem of the two contracts is asymmetric information, which consists of adverse selection and moral hazard. We propose the Markov chain model as a solution for the Islamic banks to reduce the risk because of adverse selection and moral hazard in mudarabah  and murabahah  contract. In our model, we also propose a mechanism to avoid strategic default in mudarabah contract. We observed two different probabilities of an applicant to become a beneficiary to find the solution to the problems. The results of this study, the bank can decrease the probability of an applicant to become a beneficiary to reduce the adverse selection and moral hazard in mudarabah  and murabahah contract.

Automated Fuzzy Bidding Strategy for Continuous Double Auctions Using Trading Agent’s Attitude and Market Competition

2010 ◽  
Vol 2 (4) ◽  
pp. 56-74 ◽  
Author(s):  
Madhu Goyal ◽  
Saroj Kaushik ◽  
Preetinder Kaur
Keyword(s):  
Direct Method ◽  
Market Competition ◽  
Bidding Strategy ◽  
Double Auctions ◽  
Continuous Double Auctions ◽  
Two Factors ◽  
Bidding Agents ◽  
Continuous Double Auction ◽  
Transaction Price ◽  
Bidding Process

This paper designs a novel fuzzy competition and attitude based bidding strategy (FCA-Bid) for continuous double auction in which the best transaction price is calculated on account of the attitude of the agents and the competition for the goods in the market. The estimation of attitude is based on the bidding item’s attribute assessment, which adapts the fuzzy sets technique to handle uncertainty of the bidding process. Additionally, it uses heuristic rules to determine the attitude of bidding agents. The bidding strategy also uses and determines competition in the market (based on the two factors, number of the bidders participating and the total time elapsed for an auction) using Mamdani’s Direct Method. Then the range for the trading price will be determined based on the assessed attitude and the competition in the market using the fuzzy reasoning technique. The final transaction price is calculated after considering the conflicting attitudes of the seller and the bidder toward selecting the transaction price.

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