Truthful Randomized Mechanisms for Combinatorial Auctions

Author Info

• Shahar Dobzinski

()

• Noam Nisan

()

• Michael Schapira

()

Abstract

We design two computationally-efficient incentive-compatible mechanisms for combinatorial auctions with general bidder preferences. Both mechanisms are randomized, and are incentive-compatible in the universal sense. This is in contrast to recent previous work that only addresses the weaker notion of incentive compatibility in expectation. The first mechanism obtains an $O(\sqrt{m})$-approximation of the optimal social welfare for arbitrary bidder valuations -- this is the best approximation possible in polynomial time. The second one obtains an $O(\log^2 m)$-approximation for a subclass of bidder valuations that includes all submodular bidders. This improves over the best previously obtained incentive-compatible mechanism for this class which only provides an $O(\sqrt m)$-approximation.

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File URL: http://ratio.huji.ac.il/sites/default/files/publications/dp408.pdf

Bibliographic Info

Paper provided by The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem in its series Discussion Paper Series with number dp408.

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 Length: 17 pages Date of creation: Nov 2005 Date of revision: Handle: RePEc:huj:dispap:dp408 Contact details of provider: Postal: Feldman Building - Givat Ram - 91904 JerusalemPhone: +972-2-6584135Fax: +972-2-6513681Web page: http://www.ratio.huji.ac.il/Email: More information through EDIRC

References

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1. Nisan, Noam & Segal, Ilya, 2006. "The communication requirements of efficient allocations and supporting prices," Journal of Economic Theory, Elsevier, vol. 129(1), pages 192-224, July.
2. Martin J Osborne & Ariel Rubinstein, 2009. "A Course in Game Theory," Levine's Bibliography 814577000000000225, UCLA Department of Economics.
3. Nisan, Noam & Ronen, Amir, 2001. "Algorithmic Mechanism Design," Games and Economic Behavior, Elsevier, vol. 35(1-2), pages 166-196, April.
4. Liad Blumrosen & Noam Nisan, 2005. "On the Computational Power of Iterative Auctions I: Demand Queries," Discussion Paper Series dp381, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
5. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
6. Babaioff, Moshe & Feldman, Michal & Nisan, Noam & Winter, Eyal, 2012. "Combinatorial agency," Journal of Economic Theory, Elsevier, vol. 147(3), pages 999-1034.
7. Lehmann, Benny & Lehmann, Daniel & Nisan, Noam, 2006. "Combinatorial auctions with decreasing marginal utilities," Games and Economic Behavior, Elsevier, vol. 55(2), pages 270-296, May.
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