61 research outputs found
Expressiveness and Robustness of First-Price Position Auctions
Since economic mechanisms are often applied to very different instances of
the same problem, it is desirable to identify mechanisms that work well in a
wide range of circumstances. We pursue this goal for a position auction setting
and specifically seek mechanisms that guarantee good outcomes under both
complete and incomplete information. A variant of the generalized first-price
mechanism with multi-dimensional bids turns out to be the only standard
mechanism able to achieve this goal, even when types are one-dimensional. The
fact that expressiveness beyond the type space is both necessary and sufficient
for this kind of robustness provides an interesting counterpoint to previous
work on position auctions that has highlighted the benefits of simplicity. From
a technical perspective our results are interesting because they establish
equilibrium existence for a multi-dimensional bid space, where standard
techniques break down. The structure of the equilibrium bids moreover provides
an intuitive explanation for why first-price payments may be able to support
equilibria in a wider range of circumstances than second-price payments
ESSAYS ON PACKAGE AUCTIONS
The recent auctions literature has devoted much attention to mechanisms that allow package bidding: all-or-nothing bids for sets of items. Introducing package bids can improve efficiency by reducing the bidders "exposure" risk of winning undesirable combinations of items. However, package bids can also create a free-rider problem for relatively small bidders since they need to compete jointly against their larger opponents, potentially reducing efficiency. The inherent asymmetry among different package bids significantly complicates an equilibrium analysis of the costs and benefits of allowing package bids in auctions.
The first chapter makes progress in solving for Bayesian-Nash equilibria of the first-price package auction. We develop a new computational method which is based on a complementarity formulation of the system of equilibrium inequalities. Additionally, we establish existence of equilibrium for special cases. Our analysis shows that introducing package bidding can significantly improve efficiency when the exposure risk faced by bidders is large, but it can reduce efficiency otherwise. We also compare the first-price package auction with other leading package alternatives. Surprisingly, in the environment considered, the first-price package auction performs reasonably well, with respect to both revenue and efficiency, despite the presence of a strong free-rider problem.
The second chapter studies the core-selecting auctions that were proposed recently as alternatives to the famous Vickrey-Clarke Groves (VCG) mechanism for environments with complementarities. The existing literature on core-selecting auctions is limited to only a complete-information analysis. We consider a simple incomplete-information model which allows us to do a full equilibrium analysis, including closed-form solutions for some distributions, for four different core-selecting auction formats suggested in the literature. Our model also admits correlations among bidders values. We second that the revenues and efficiency from core-selecting auctions improve as correlations among bidders values increase, while the revenues from the Vickrey auction worsen. Thus, there may be good reasons for policymakers to utilize a core-selecting auction rather than a VCG mechanism in realistic environments
Computer-aided verification in mechanism design
In mechanism design, the gold standard solution concepts are dominant
strategy incentive compatibility and Bayesian incentive compatibility. These
solution concepts relieve the (possibly unsophisticated) bidders from the need
to engage in complicated strategizing. While incentive properties are simple to
state, their proofs are specific to the mechanism and can be quite complex.
This raises two concerns. From a practical perspective, checking a complex
proof can be a tedious process, often requiring experts knowledgeable in
mechanism design. Furthermore, from a modeling perspective, if unsophisticated
agents are unconvinced of incentive properties, they may strategize in
unpredictable ways.
To address both concerns, we explore techniques from computer-aided
verification to construct formal proofs of incentive properties. Because formal
proofs can be automatically checked, agents do not need to manually check the
properties, or even understand the proof. To demonstrate, we present the
verification of a sophisticated mechanism: the generic reduction from Bayesian
incentive compatible mechanism design to algorithm design given by Hartline,
Kleinberg, and Malekian. This mechanism presents new challenges for formal
verification, including essential use of randomness from both the execution of
the mechanism and from the prior type distributions. As an immediate
consequence, our work also formalizes Bayesian incentive compatibility for the
entire family of mechanisms derived via this reduction. Finally, as an
intermediate step in our formalization, we provide the first formal
verification of incentive compatibility for the celebrated
Vickrey-Clarke-Groves mechanism
Efficiency Guarantees in Auctions with Budgets
In settings where players have a limited access to liquidity, represented in
the form of budget constraints, efficiency maximization has proven to be a
challenging goal. In particular, the social welfare cannot be approximated by a
better factor then the number of players. Therefore, the literature has mainly
resorted to Pareto-efficiency as a way to achieve efficiency in such settings.
While successful in some important scenarios, in many settings it is known that
either exactly one incentive-compatible auction that always outputs a
Pareto-efficient solution, or that no truthful mechanism can always guarantee a
Pareto-efficient outcome. Traditionally, impossibility results can be avoided
by considering approximations. However, Pareto-efficiency is a binary property
(is either satisfied or not), which does not allow for approximations.
In this paper we propose a new notion of efficiency, called \emph{liquid
welfare}. This is the maximum amount of revenue an omniscient seller would be
able to extract from a certain instance. We explain the intuition behind this
objective function and show that it can be 2-approximated by two different
auctions. Moreover, we show that no truthful algorithm can guarantee an
approximation factor better than 4/3 with respect to the liquid welfare, and
provide a truthful auction that attains this bound in a special case.
Importantly, the liquid welfare benchmark also overcomes impossibilities for
some settings. While it is impossible to design Pareto-efficient auctions for
multi-unit auctions where players have decreasing marginal values, we give a
deterministic -approximation for the liquid welfare in this setting
Integration of Blockchain and Auction Models: A Survey, Some Applications, and Challenges
In recent years, blockchain has gained widespread attention as an emerging
technology for decentralization, transparency, and immutability in advancing
online activities over public networks. As an essential market process,
auctions have been well studied and applied in many business fields due to
their efficiency and contributions to fair trade. Complementary features
between blockchain and auction models trigger a great potential for research
and innovation. On the one hand, the decentralized nature of blockchain can
provide a trustworthy, secure, and cost-effective mechanism to manage the
auction process; on the other hand, auction models can be utilized to design
incentive and consensus protocols in blockchain architectures. These
opportunities have attracted enormous research and innovation activities in
both academia and industry; however, there is a lack of an in-depth review of
existing solutions and achievements. In this paper, we conduct a comprehensive
state-of-the-art survey of these two research topics. We review the existing
solutions for integrating blockchain and auction models, with some
application-oriented taxonomies generated. Additionally, we highlight some open
research challenges and future directions towards integrated blockchain-auction
models
PADS: Privacy-preserving Auction Design forAllocating Dynamically Priced Cloud Resources
With the rapid growth of Cloud Computing technologies, enterprises are increasingly deploying their services in the Cloud. Dynamically priced cloud resources such as the Amazon EC2 Spot Instance provides an efficient mechanism for cloud service providers to trade resources with potential buyers using an auction mechanism. With the dynamically priced cloud resource markets, cloud consumers can buy resources at a significantly lower cost than statically priced cloud resources such as the on-demand instances in Amazon EC2. While dynamically priced cloud resources enable to maximize datacenter resource utilization and minimize cost for the consumers, unfortunately, such auction mechanisms achieve these benefits only at a cost significant of private information leakage. In an auction-based mechanism, the private information includes information on the demands of the consumers that can lead an attacker to understand the current computing requirements of the consumers and perhaps even allow the inference of the workload patterns of the consumers. In this paper, we propose PADS, a strategy-proof differentially private auction mechanism that allows cloud providers to privately trade resources with cloud consumers in such a way that individual bidding information of the cloud consumers is not exposed by the auction mechanism. We demonstrate that PADS achieves differential privacy and approximate truthfulness guarantees while maintaining good performance in terms of revenue gains and allocation efficiency. We evaluate PADS through extensive simulation experiments that demonstrate that in comparison to traditional auction mechanisms, PADS achieves relatively high revenues for cloud providers while guaranteeing the privacy of the participating consumers
Incentive mechanism design for mobile crowd sensing systems
The recent proliferation of increasingly capable and affordable mobile devices with a plethora of on-board and portable sensors that pervade every corner of the world has given rise to the fast development and wide deployment of mobile crowd sensing (MCS) systems. Nowadays, applications of MCS systems have covered almost every aspect of people's everyday living and working, such as ambient environment monitoring, healthcare, floor plan reconstruction, smart transportation, indoor localization, and many others.
Despite their tremendous benefits, MCS systems pose great new research challenges, of which, this thesis targets one important facet, that is, to effectively incentivize (crowd) workers to achieve maximum participation in MCS systems. Participating in crowd sensing tasks is usually a costly procedure for individual workers. On one hand, it consumes workers' resources, such as computing power, battery, and so forth. On the other hand, a considerable portion of sensing tasks require the submission of workers' sensitive and private information, which causes privacy leakage for participants. Clearly, the power of crowd sensing could not be fully unleashed, unless workers are properly incentivized to participate via satisfactory rewards that effectively compensate their participation costs.
Targeting the above challenge, in this thesis, I present a series of novel incentive mechanisms, which can be utilized to effectively incentivize worker participation in MCS systems. The proposed mechanisms not only incorporate workers' quality of information in order to selectively recruit relatively more reliable workers for sensing, but also preserve workers' privacy so as to prevent workers from being disincentivized by excessive privacy leakage. I demonstrate through rigorous theoretical analyses and extensive simulations that the proposed incentive mechanisms bear many desirable properties theoretically, and have great potential to be practically applied
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