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Auctions & Financial Markets — Zurich Center for Market Design

Auctions & Financial Markets

Designing the rules of modern trading

Overview

From bidding to price discovery

Financial markets are the backbone of the global economy. The way these markets are designed — whether through auctions, continuous trading, or decentralized protocols — plays a vital role in shaping their efficiency, fairness, and overall performance.

Auctions and Financial Markets

Recent Research Papers

At the Zurich Center for Market Design, we explore the strategic rules that govern market behavior, examining how design choices influence participation, pricing, and wealth distribution.

Below, we showcase a selection of our recent research on auction systems and financial markets, highlighting how these mechanisms can be improved for better outcomes.

Double Auctions and Transaction Costs

Simon Jantschgi, Heinrich Nax, Bary Pradelski, Marek Pycia

How do transaction costs affect incentives and outcomes in strategic markets? This research investigates the design of transaction costs and their impact on market behavior.

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Foundations of Double Auctions from Theory and Practice

Simon Jantschgi, Heinrich Nax, Bary Pradelski, Marek Pycia

This paper bridges the gap between theoretical models of double auctions and their real-world applications, revealing novel insights into market stability and efficiency.

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Transaction Cost (In)Transparency: Coasian Dynamics in Frequent Batch Auctions

Simon Jantschgi

This study examines how transparency in transaction costs affects behavior in frequent batch auctions, exploring implications for auction design and market performance.

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Identity-Compatible Auctions

Haoyuan Zeng

This research explores identity-compatible auction designs that prevent manipulation through fake identities, offering a more secure and trustworthy auction environment.

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A Case for Pay-as-Bid Auctions

Marek Pycia, Kyle Woodward

This paper investigates the strategic and welfare effects of pay-as-bid auctions, comparing them to uniform-price auctions and identifying when they perform better.

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Non-Bossiness and First-Price Auctions

Marek Pycia, Madhav Raghavan

This research analyzes the non-bossiness property of auctions, demonstrating how first-price auctions can satisfy non-bossiness, IR, and efficiency requirements.

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Equitable Auctions

Simon Finster, Patrick Loiseau, Simon Mauras, Mathieu Molina, Bary Pradelski

This paper introduces equity as a criterion for fair allocation, examining how surplus can be shared among auction winners in a more equitable way.

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