  We consider a double-auction mechanism, which was recently proposed in the
context of rate allocation in mobile data-offloading markets. Network operators
(users) derive benefit from offloading their traffic to third party WiFi or
femtocell networks (link-suppliers). Link-suppliers experience costs for the
additional capacity that they provide. Users and link-suppliers (collectively
referred to as agents) have their pay-offs and cost functions as private
knowledge. A network-manager decomposes the problem into a network problem and
agent problems. The surrogate pay-offs and cost functions are modulated by the
agents' bids. Agents' payoffs and costs are then determined by the allocations
and prices set by the network-manager. Under this design, so long as the agents
do not anticipate the effect of their actions on the prices set by the
network-manager (i.e., price-taking agents), a competitive equilibrium exists
as a solution to the network and agent problems, and this equilibrium optimizes
the sum utility of all agents. However, this design fails when the agents are
all strategic (price-anticipating). Specifically, the presence of a strategic
link-supplier drives the system to an undesirable equilibrium with zero
participation resulting in an efficiency loss of 100%. This is in stark
contrast to an earlier setting where the users alone are strategic but the
link-supplier is not - the efficiency loss is known to be at most 34%. The
paper then proposes a Stackelberg game modification where the efficiency loss
can be characterized in terms of the link-supplier's cost function when the
users' pay-off functions are linear. Specifically, when the link-supplier's
cost function is quadratic, the worst case efficiency loss is 25%. Further, the
loss in efficiency improves for polynomial cost functions of higher degree.
