Discrimination between social groups: The influence of inclusiveness-enhancing mechanisms on trade

The bargaining power of prosumers in a market can vary significantly. Participants can range from industrial participants to powerful and less powerful citizens. Existing trade mechanisms in such markets, e.g., in rural India’s energy trade market, show occurrences of discrimination, exclusion, and unfairness. We study how discrimination affects market access, efficiency, and demand satisfaction for the discriminating and discriminated groups via an agent-based simulation, incorporating the available real data. We introduce a mechanism for such markets that is designed for the values of inclusion and equal opportunities. The crux of our mechanism is that goods are divided into smaller units, as determined by the market participants’ surplus and demands, and traded anonymously via agents representing the prosumers. We evaluate six hypotheses in a case study about energy trade in rural India, where members of a caste known as Dalits are discriminated by Others. We show that anonymization contributes to the value of inclusion, and the combination of anonymization and inclusion contributes to equal opportunities with respect to market access for both Dalits and Others.