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AHEAD : Ad-Hoc Electronic Auction Design

2020-10-06 · Joffrey Derchu, Philippe Guillot, Thibaut Mastrolia, Mathieu Rosenbaum

We introduce a new matching design for financial transactions in an electronic market. In this mechanism, called ad-hoc electronic auction design (AHEAD), market participants can trade between themselves at a fixed price and trigger an auction when they are no longer satisfied with this fixed price. In this context, we prove that a Nash equilibrium is obtained between market participants. Furthermore, we are able to assess quantitatively the relevance of ad-hoc auctions and to compare them with periodic auctions and continuous limit order books. We show that from the investors' viewpoint, the microstructure of the asset is usually significantly improved when using AHEAD.

📄 PDF Abstract BibTeX arXiv:2010.02827

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