Time is discretized into bid/ask (BA) and buy/sell (BS) steps. A trading period consists of a series of alternating BA and BS steps, starting with a BA. In a BA step, traders are allowed to simulatneously post bids and asks. A central monitor informs traders of each others' bids/asks. The current (highest) bid and the current (lowest) ask enter into a BS step. In this step, either trader can accept the others offer, in which case a trade is executed. Transactions are governed by AURORA rules, which state that only the holders of the current bid and ask are allowed to trade.
These trading periods are grouped into rounds, and rounds are grouped into DA games. The valuations of the tokens (goods) are constant over the periods of a round, but can change between rounds. The set of traders is constant within a game.
(Rust, Miller, and Palmer, 1994)
The Santa Fe Institute Competition Environment
In 1990, the Santa Fe Institute sponsored a computerized double auction tournament in an effort to investigate the nature of effective trading strategies. The algorithms Amy and I investigated did not come directly from this competition, but I decided to summarize the market structure of the tournament to better understand the results it gave about effective trading strategies.