Why Hold a Sequal to the Santa Fe Double Auction Tournament?

Why Hold a Sequel to the Santa Fe Double Auction Tournament?


We are planning a sequel to the original Santa Fe Double Auction Tournament in 1990, although the date of the next tournament and the amount of the prize money are not yet determined. We are holding a sequel because we have learned a lot of things since 1990, in particular there have been many advances in computer technology, artificial intelligence, computational economics, and numerical dynamic programming since then. We think that a better, smarter generation of program traders can be developed that could rival or even exceed most human traders in their performance in the double auction, similar to the way IBM's Deep Blue Chess program beat the world champion, Garry Kasparov in 1997. However there is no acknowledged human "grand master" of the double auction market, and due to inherent randomness in allocations of tokens in the double auction market, we need to play many games to average out the randomness in order to make a clear determination whether particular strategies are "winners". For this reason, the sequel Santa Fe double auction tournament will be another tournament between program trading strategies. We are currently using the trading strategies submitted tot he first double auction market to train a second generation of (hopefully) significantly smarter program traders. People who login to trade in new Java version of the Santa Fe Double auction market will not just be using a better graphical trading interface, they will be encountering much better (smarter) computerized opponents as well. This will make it harder and more challenging for humans to trade in this market (i.e. to earn high profits). We are allowing humans to login and trade in the new Java version of the Santa Fe Double Auction market so they can see how the market works and develop their own ideas for how to develop effective program trading strategies. In early 2008 we will publish a specification and provide a gateway for people to submit their own program trading strategies and try them out in practice games, including using the existing set of computerized trading strategies to train and debug and refine their own traders in advance of the actual sequel tournament, which we expect to start sometime in late 2008 or early 2009.

Why Hold a Sequel to the Santa Fe Double Auction Tournament?

We are planning a sequel to the original Santa Fe Double Auction Tournament in 1990, although the date of the next tournament and the amount of the prize money are not yet determined.

We are holding a sequel because we have learned a lot of things since 1990, in particular there have been many advances in computer technology, artificial intelligence, computational economics, and numerical dynamic programming since then. We think that a better, smarter generation of program traders can be developed that could rival or even exceed most human traders in their performance in the double auction, similar to the way IBM's Deep Blue Chess program beat the world champion, Garry Kasparov in 1997. However there is no acknowledged human "grand master" of the double auction market, and due to inherent randomness in allocations of tokens in the double auction market, we need to play many games to average out the randomness in order to make a clear determination whether particular strategies are "winners". For this reason, the sequel Santa Fe double auction tournament will be another tournament between program trading strategies.

We are currently using the trading strategies submitted tot he first double auction market to train a second generation of (hopefully) significantly smarter program traders. People who login to trade in new Java version of the Santa Fe Double auction market will not just be using a better graphical trading interface, they will be encountering much better (smarter) computerized opponents as well. This will make it harder and more challenging for humans to trade in this market (i.e. to earn high profits).

We are allowing humans to login and trade in the new Java version of the Santa Fe Double Auction market so they can see how the market works and develop their own ideas for how to develop effective program trading strategies. In early 2008 we will publish a specification and provide a gateway for people to submit their own program trading strategies and try them out in practice games, including using the existing set of computerized trading strategies to train and debug and refine their own traders in advance of the actual sequel tournament, which we expect to start sometime in late 2008 or early 2009.

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