We provide simple and approximately revenue-optimal mechanisms in the multi-item multi-bidder settings. We unify and improve all previous results, as well as generalize the results to broader cases. In particular, we prove that the better of the following two simple, deterministic and Dominant Strategy Incentive Compatible mechanisms, a sequential posted price mechanism or an anonymous sequential posted price mechanism with entry fee, achieves a constant fraction of the optimal revenue among all randomized, Bayesian Incentive Compatible mechanisms, when buyers' valuations are XOS over independent items. If the buyers' valuations are subadditive over independent items, the approximation factor degrades to $O(\log m)$, where $m$ is the number of items. We obtain our results by first extending the Cai-Devanur-Weinberg duality framework to derive an effective benchmark of the optimal revenue for subadditive bidders, and then analyzing this upper bound with new techniques.
Mechanism design for one-sided markets has been investigated for several decades in economics and in computer science. More recently, there has been an increased attention on mechanisms for two-sided markets, in which buyers and sellers act strategically. For two-sided markets, an impossibility result of Myerson and Satterthwaite states that no mechanism can simultaneously satisfy individual rationality (IR), incentive compatibility (IC), strong budget-balance (SBB), and be efficient. On the other hand, important applications to web advertisement, stock exchange, and frequency spectrum allocat…
Benchmark-Tight Approximation Ratio of Simple Mechanism for a Unit-Demand Buyer
Hong Kong University of Science and Technology(香港科技大学);Huawei’s Taylor Lab(华为泰勒实验室);Shanghai University of Finance and Economics, Laboratory of Interdisciplinary Research of Computation and Economics (SUFE)(上海财经大学计算与经济交叉研究实验室);Huawei TCS Lab(华为TCS实验室)
Linear Fisher markets are a fundamental economic model with applications in fair division as well as large-scale Internet markets. In the finite-dimensional case of $n$ buyers and $m$ items, a market equilibrium can be computed using the Eisenberg-Gale convex program. Motivated by large-scale Internet advertising and fair division applications, this paper considers a generalization of a linear Fisher market where there is a finite set of buyers and a continuum of items. We introduce generalizations of the Eisenberg-Gale convex program and its dual to this infinite-dimensional setting, which le…
We study the problem of selling $n$ heterogeneous items to a single buyer, whose values for different items are dependent. Under arbitrary dependence, Hart and Nisan show that no simple mechanism can achieve a non-negligible fraction of the optimal revenue even with only two items. We consider the setting where the buyer's type is drawn from a correlated distribution that can be captured by a Markov Random Field, one of the most prominent frameworks for modeling high-dimensional distributions with structure. If the buyer's valuation is additive or unit-demand, we extend the result to all MRFs …