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                             Santa Fe Institute's
               D O U B L E  A U C T I O N  T O U R N A M E N T


                CHAPTER 7 -- TOURNAMENT RULES AND REGISTRATION
                ----------------------------------------------

This chapter specifies the rules, parameter settings and entry procedures for
the actual Double Auction tournament to be held in March 1990.  The rules of
the Double Auction itself are given in the Introduction chapter; this
specifies the rules relating to tournament entries and the distribution of the
$10,000 prize money. The structure of the tournament is also discussed.
An entry form appears at the end of the chapter.


                             7.1 Tournament Rules
                             --------------------
1.  The deadline for entries is March 1, 1990.  Entries must be received
    at the Santa Fe Institute by 5 PM (MST) on this date to be eligible for
    inclusion in the tournament. If an entry conforms to all the rules listed
    below it will be accepted as a PLAYER in the DA tournament. If an entry
    has been submitted before the deadline and is found to violate one of the
    rules listed below, it will be returned to the entrant for revision and
    conditional acceptance provided the revised strategy is received before the
    deadline. Entrants will have at most one chance to submit strategies that
    conform to the rules. In the sequel we will refer to an accepted computer
    program (source and associated materials as described below) as a "player",
    and "entrant" as the human(s) who submitted.

2.  A maximum of 100 players will be accepted. Of these, 70 will be accepted
    on a first-come, first-served basis starting on September 1, 1989 until the
    entry deadline of March 1, 1990. The remaining 30 slots have been reserved
    for selection by the tournament organizers to guarantee sufficient diversity
    in the types of strategies submitted. If the organizers do not use all
    30 slots, those that remain will be allocated on a first-come, first-served
    basis as described above. A list of current entrants' names and E-mail
    addresses is available by ftp in the "entries" file, or by request from the
    organizers. Entrants who wish to remain anonymous throughout the
    tournament can have their names appear as "anonymous" in the entries file.

3.  A valid entry consists of

        A. source code for the user routines in one of the skeleton
           programs, subject to additional restrictions listed below, and

        B. a $10.00 entry fee payable to Santa Fe Institute, and

        C. a signed, completed registration form (at the end of this chapter).

4.  The user routines referred to in 3A are the 4 Strategy Routines and 8
    optional Miscellaneous Routines listed in the "skeleton" chapter of the
    documentation.  They must be accompanied by appropriate declarations
    and/or definitions of the variables and parameters, as required by the
    language used.

5.  The routines must be written in C, Fortran or Pascal and must be
    compatible with the skeleton programs as provided in these languages.

6.  As an alternative to 3A, 4, and 5, users may submit source for a complete
    self-contained player program.  This must:

        A. Conform to the message-passing protocol described in the "messages"
           chapter of the documentation.

        B. Be able to communicate using the PIPEBASED method with the monitor
           on a Sun-4 system; this mainly requires that messages be read from
           stdin and written to stdout.

        C. Be supplied in source form in C, Fortran, or Pascal.  Other
           languages may be considered, but only by prior arrangement with
           the organizers.

7.  All players must be sufficiently documented by comments in the source,
    and optionally by additional written (or ascii text) materials.  The
    documentation should include at least the following:

        A. The name, affiliation, and address of each author.  These MUST
           appear in comments in the source, as well as on the entry form.

        B. A general intuitive description of what the strategy does.

        C. Definition of all significant variables and parameters.

        D. References to any specific algorithms or numerical methods used.

        E. Description of the content and use of any external files needed
           or created by the program.

        F. Notes on any special requirements for compiling, linking, or
           running the program.

    We reserve the right to reject programs which we deem to be poorly
    documented or unnecessarily obscure.  In such cases the authors will be
    invited to make improvements within a reasonable time before any final
    rejection.

8.  Participants' programs may create and use external files, which will be
    preserved from game to game.  Each player program will have its own
    directory, and may only access files within that directory.  Additional
    files may be submitted with a tournament entry, but must be adequately
    documented.

9.  Players must be runnable on a Sun-4 running SunOS 4.0.  This means
    especially that only commonly available library routines should be used.
    Players will be checked for runnability upon receipt, and
    the organizers will make reasonable efforts to make any minor
    alterations necessary to suit local conditions.  Ultimately however, we
    reserve the right to reject programs that we cannot run.  Authors should
    contact the organizers if in doubt about the availability of library
    routines or language features at Santa Fe.

10. There are no explicit CPU time, memory, or disk storage limits for
    player programs.  However if a program is found to use
    greatly excessive amounts of any of the above resources (relative to
    what is used by other players), the organizers reserve the right to
    request the entrant to modify the program so that its requirements are
    more in line with other players or, as a last resort, to disqualify
    the program.

11. Submitted players cannot be withdrawn or revised once submitted,
    except to satisfy the requirements these rules.  Major changes in the
    player program will be prohibited once submitted.

12. Although joint entries are permissible, at most one player will be
    allowed per entrant.  Duplicate or plagiarized player programs will be
    disqualified; all submissions must be distinct.

13. Players are only allowed to use information

        A. explicitly passed to them by the monitor, or
        B. stored in their private files (optional).

    Different players may not communicate directly, and may not share
    files.  Any attempt to violate these rules (in letter or spirit) will be
    grounds for disqualification.

14. Both tournament entrants and non-entrants may use the Santa Fe Token
    Exchange (SFTE) for practice games if their hardware and software
    permits it.  No guarantee of availability on a particular system or at a
    particular time is made.  Traders on the SFTE may be either human or
    robot traders.  There will be no cash profits paid for trading on the
    SFTE, and the tournament will be run independently of the outcome of any
    SFTE games.

15. Traders playing as local (non-network) players on the SFTE will be
    selected from those developed at SFI.  Different selections may be made at
    different times of day.  Participants are invited to submit their programs
    for this purpose, though no guarantee of using them is made. The
    organizers guarantee the confidentiality of programs submitted for
    local SFTE use (by using only the binary executable version of the
    program in an inaccessable file).

16. Prize money totaling approximately $10,000 will be paid to
    participating entrants in proportion to the total trading profits earned
    by their player programs in all tournament games in which they play
    (see description of parameter settings below).

17. In order to encourage entrants to develop trading strategies that
    perform well in a wide variety of environments, the parameter settings
    in the Double Auction tournament games will be systematically altered.
    In the tournament games the base token values (see the 'game' file) will
    normally be set to zero, so the relevant parameters consist of the
    following 10 variables (for more detailed definitions, see chapters 1
    and 3, and 'game' file):

        NTOKENS     number of tokens assigned to each trader
        NBUYERS     number of buyers
        NSELLERS    number of sellers
        NROUNDS     number of rounds in DA game
        NPERIODS    number of periods per round
        NTIMES      number of bid/offer and buy/sell steps per period
        RAN1        uniform random token generator upper bound 1
        RAN2        uniform random token generator upper bound 2
        RAN3        uniform random token generator upper bound 3
        RAN4        uniform random token generator upper bound 4

    The meanings of RAN1, ..., RAN4 are discussed in detail in rule 25 below.

18. Games in the Double Auction Tournament will be selected from a fixed number
    of ENVIRONMENTS, E(i), i=1,...,I.  Each environment E(i) is a complete
    specification of the 10 DA game parameters listed in 17.  All the above
    parameters are passed to each player program at the start of each DA
    game (except that RAN1-4 and the token generation method may be withheld
    in a few environments).  This guarantees that players have
    common knowledge about the environment, a game-theoretic consideration.

19. The specific environments used will be chosen by the organizers in
    advance of the actual tournament, guided in part by scientific objectives
    and in part by a desire to give all entrants an equal opportunity to do
    well in the tournament.  However information on I and E(i) will not be
    released to entrants before the tournament, to discourage them from
    "tuning" their programs to specific environments.

20. For each environment E(i), a total of N(i) DA games will be played,
    distributing a share A(i) of the $10,000 prize money with

            A(1)+ ... +A(I) = $10000.

    The number of games N(i) will be chosen sufficiently large to average
    out variations in profits due to random choices of player matchings,
    token values, and tie-breaking rules.

21. In each of the N(i) DA games in environment E(i), entrants' programs
    will be randomly chosen- without replacement- from the pool of valid
    players for inclusion in the current DA game. If a player program
    is drawn that cannot fill the position (e.g. if the entrant only wrote
    a "buyer" program but was selected to play the role of "seller") the
    the program is withdrawn from the pool and another player is picked.
    Players which have already been selected are also withdrawn from the pool.

    Draws will continue in this way until the requisite number of buyer and
    seller programs are selected to play in the current DA game. This implies in
    particular that no program will play more than once in a single DA game.

22. If TP(i,j) is the total token profit earned by a player j in the
    subset of the N(i) games in environment E(i) in which it participated,
    then the actual dollar payment for that environment, DP(i,j), is given by:

             DP(i,j) = c(i)TP(i,j)

    where c(i) is the CONVERSION RATIO between token profits and dollar profits.
    The total dollar payment to entrant j in the entire tournament is then
    simply the sum over each of the I environments, DP(1,j) + .... + DP(I,j).

23. The conversion ratio c(i) between token profits and actual dollar
    payments will be set in each environment E(i) to satisfy the following
    equation:

                  A(i) = c(i)TS(i)

    Here TS(i) is the total surplus of the N(i) games in environment E(i).
    In a single game the surplus is geometrically the area between the
    implied supply and demand curves, to the left of the point where they
    intersect, and would be the total profit if all trading occurred at the
    theoretical competitive equilibrium price. TS(i) will be calculated by
    summing this surplus over the N(i) games in environment E(i).

    Since the conversion ratios c(i) will thus be determined a priori, the
    total dollar payment to participants may not be exactly $10,000, but is
    expected to be within a few percent of that figure.

24. Trading programs have the right of refusal.  Thus, entrants do not
    have to write strategies to play in all possible environments.  For
    example an entrant may submit a program that only plays the role of
    buyer.  Of course, since the expected profit in any given game is
    positive, an entrant's tournament earnings will be reduced in proportion
    to the fraction of games in which their program is unable to play.

25. Token values are represented by T(j,k,l), where j indexes the player,
    k indexes the token number, and l indexes whether the player is a buyer or a
    seller. Tokens will normally be randomly generated according to

        T(j,k,l) = A + B(l) + C(k,l) + D(j,k,l)

    where

    A = U[0,RAN1],
    B(l) = U[0,RAN2],
    C(k,l) = U[0,RAN3],
    D(j,k,l) = U[0,RAN4].

    Here U[0,R] denotes a uniform random variable on the interval [0,R].
    Random variables A, B(l), C(k,l), and D(j,k,l) are drawn independently of
    each other and independently for distinct indices (j,k,l).

    RAN1, ..., RAN4 are passed to the trading strategy using the 'gametype'
    variable; see definition of 'gametype' in section 3.2 "Public Constants"
    of chapter 3. Note that due to technicalities of the software design,
    no token value is allowed to exceed 8000. This implies that for very
    large settings for RAN(i), i=1,...,4 the actual distribution is truncated.
    In the tournament we will not choose any values for RAN(i) i=1,...,4 that
    yield truncated distributions.

    In a few environments, representing not more than 33% of the total
    available profit, the tokens may be generated by another method not
    revealed to the players.  This will be indicated by gametype = 0.

26. The organizers expect entrants to obey the spirit as well as the letter
    of the above rules to produce strategies that exhibit "reasonable trading
    behavior". In the event that certain strategies are found to behave in a
    grossly unreasonable way (e.g. purely random strategies, or ones designed
    to maximize losses) in a way that has not been explicitly covered in
    the above rules, the organizers reserve the right to exclude the deviant
    strategies after giving the entrant an opportunity to revise the strategy
    to produce more reasonable behavior.


                              7.2 Registration Form
                              ---------------------

Submit a printed copy of the following form by mail.  A copy sent by
electronic mail or by fax may be used to establish a tournament entry, but a
printed copy with signature(s) and entry fee must follow promptly.

If your strategy has been developed by more than one person, submit only one
trading strategy and entry fee, but include separate entry forms for
each co-author.

Send forms to:
                                      DAT
                              Santa Fe Institute
                               1120 Canyon Road
                          Santa Fe, New Mexico 87501
                             Phone: (505) 984-8800
                             Fax: (505) 982-0565
                          E-mail: dat@sfi.santafe.edu

----------------------------------------------------------------------------

                             Santa Fe Institute's
               D O U B L E A U C T I O N T O U R N A M E N T

                               REGISTRATION FORM

I hereby register my entry for the Double Auction Tournament to be held at the
Santa Fe Institute in March 1990.  My entry consists of

        1) This form, completed and signed.

        2) The entry fee of $10.00 (check or money order in U.S.  currency
           only).  Make checks payable to "Santa Fe Institute".

        3) Source code for a computer trading strategy according to the
           tournament rules.  Check one:
                __ 5.25 inch DOS disk enclosed (plain ascii file(s))
                __ 3.5  inch Macintosh disk enclosed (TEXT format)
                __ Sent by electronic mail to "dat@sfi.santafe.edu"
                __ Submitted by other means: _________________________________

        4) Other: (check those that apply -- all are optional)
                __ written documentation
                __ special instructions for compiling/linking/running
                __ auxiliary files needed by program

I understand that this tournament is part of a research project to gather
scientific data to improve our understanding of the market mechanism.  I have
read and accept the tournament rules that specify the form of valid computer
program entries, and describe how the approximately $10,000 prize money will
be distributed to tournament participants.

By submitting my trading strategy, I am giving researchers at the Santa Fe
Institute the right to use it for scientific purposes in applications and
experiments of their choice after the Double Auction tournament is held in
March 1990.  In particular, I grant them the right to describe my strategy in
published reports, although I may choose not to be identified as the author of
my trading strategy.


    Signed      ______________________________________   Date ____________

    Name        __________________________________________________________

    Affiliation __________________________________________________________

    Address     __________________________________________________________

                __________________________________________________________

    Phone ________________________   E-Mail ______________________________


Do you wish to be identified as author of your strategy in published
reports (and public list of entrants)?                 __ yes __ no

Did you use SFTE to develope or refine your strategy?  -- yes -- no

If yes, did SFTE help you improve your strategy?       -- yes -- mo


