A Comparative Study Of Different Double Auction Mechanisms Under The Background Of Electronic Trading

As one of the world’s oldest transaction and price discovery mechanisms, auction has a long history. In the traditional one-way auction, due to the characteristics of the transaction structure, buyers and sellers are of large differences in their respective advantages. However, in the double auction, because the number of buyers and the number of sellers are more than one, buyers and sellers both lose their comparative advantage which they have in the one-way auction. The entire structure of the market turns into a trading network. Even with few market participators, double auctions’ competitive equilibrium can be achieved in a relatively short time. Because of its unique advantages, the trading mechanism has become the core of many trading platforms.With the development of computer technology and the Internet, the auction system under the background of electronic trading has also ushered in a new development. Compared with the traditional auction environment, auction system under electronic trading background not only breaks the time and space limitations, but also improves greatly by taking the advantage of the technology. For example, selling-restricting auction system used by China’s stock market for yeas is also one of the significant improvements of auction systems. However, previous studies on the study of this major improvement were few. Therefore, using sophisticated experimental methods, this article tries to compare the general double auction system with selling-restricting auction system so to find out the differences in risks, fairness and trading behaviors.Studies have shown that although the general double auction market and selling resction double auction market have showed significant differences in fluidity, the general double auction market’s bubble isn’t significantly higher than the selling-restricting double auction market. Also, in selling-restricting double auction market, large invesors’ performance is better than retail investos’. But In general double auction market, the possibility of a better retail performance is higher. In addition, there are also significant differences of traders’ behavoirs in the different markets. In general double auction market, the individuals’ yields, their degree of risk aversion and loss aversion negative correlated, indicating that people with greater risk appetite may get more benefits in the market. In addition, no matter what kind the market is, the climate of the market directly impacts the trader’s yields. Also, traders with lottery experience are easier to perform better.The result shows that sell-restricting double auction market is more conducive to large investors, while the general double auction is relatively conductive to retail investors, which could provide guidance for trading platforms and traders to choose the suitable system for them.