Polyhedral Clinching Auctions for Two-sided Markets

In this paper, we present a new model and mechanism for auctions in two-sided markets of buyers and sellers, with budget constraints imposed on buyers. Our mechanism is viewed as a two-sided extension of the polyhedral clinching auction by Goel et al., and enjoys various nice properties, such as incentive compatibility of buyers, individual rationality, pareto optimality, strong budget balance. Our framework is built on polymatroid theory, and hence is applicable to a wide variety of models that include multiunit auctions, matching markets and reservation exchange markets.