Co-evolutionary auction mechanism design: a preliminary report

Abstract. Auctions can be thought of as a method for resource allo-cation. The economic theory behind such systems is mechanism design. Traditionally, economists have approached design problems by studying the analytic or experimental properties of different mechanisms. An al-ternative is to view a mechanism as the outcome of some evolutionary process involving buyers, sellers and an auctioneer, and so automatically generate not just strategies for trading, but also strategies for auctioneer-ing. As a first step in this alternative direction, we have applied genetic programming to the development of an auction pricing rule for double auctions in a wholesale electricity marketplace.