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Agents that react to changing market situations
Kwang Mong Sim1, Chung Yu Choi
1Dept. of Inf. Eng., Chinese Univ. of Hong Kong, Shatin, China.
Abstract:
Market-driven agents are negotiation agents that react to changing market situations by making adjustable rates of concession. This paper presents 1) the foundations for designing market-driven strategies of agents, 2) a testbed of market-driven agents, 3) experimental results in simulating the market-driven approach, and 4) theoretical analyses of agents' performance in extremely large markets. In determining the amount of concession for each trading cycle, market-driven agents in this research are guided by four mathematical functions of eagerness, remaining trading time, trading opportunity , and competition. At different stages of trading, agents may adopt different trading strategies, and make different rates of concession. Four classes of strategies with respect to remaining trading time are discussed. Trading opportunity is determined by considering: 1) number of trading partners, 2) spreads-differences in utilities between an agent and its trading partners, and 3) probability of completing a deal. While eagerness represents an agent's desire to trade, trading competition is determined by the probability that it is not considered as the most preferred trader by its trading partners. Experimental results and theoretical analyses showed that agents guided by market-driven strategies 1) react to changing market situations by making prudent and appropriate rates of concession, and 2) achieve trading outcomes that correspond to intuitions in real-life trading.
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