31 research outputs found
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
Auctions with Heterogeneous Items and Budget Limits
We study individual rational, Pareto optimal, and incentive compatible
mechanisms for auctions with heterogeneous items and budget limits. For
multi-dimensional valuations we show that there can be no deterministic
mechanism with these properties for divisible items. We use this to show that
there can also be no randomized mechanism that achieves this for either
divisible or indivisible items. For single-dimensional valuations we show that
there can be no deterministic mechanism with these properties for indivisible
items, but that there is a randomized mechanism that achieves this for either
divisible or indivisible items. The impossibility results hold for public
budgets, while the mechanism allows private budgets, which is in both cases the
harder variant to show. While all positive results are polynomial-time
algorithms, all negative results hold independent of complexity considerations
Reservation Exchange Markets for Internet Advertising
Internet display advertising industry follows two main business models. One model is based on direct deals between publishers and advertisers where they sign legal contracts containing terms of fulfillment for a future inventory. The second model is a spot market based on auctioning page views in real-time on advertising exchange (AdX) platforms such as DoubleClick\u27s Ad Exchange, RightMedia, or AppNexus. These exchanges play the role of intermediaries who sell items (e.g. page-views) on behalf of a seller (e.g. a publisher) to buyers (e.g., advertisers) on the opposite side of the market. The computational and economics issues arising in this second model have been extensively investigated in recent times.
In this work, we consider a third emerging model called reservation exchange market. A reservation exchange is a two-sided market between buyer orders for blocks of advertisers\u27 impressions and seller orders for blocks of publishers\u27 page views. The goal is to match seller orders to buyer orders while providing the right incentives to both sides. In this work we first describe the important features of mechanisms for efficient reservation exchange markets. We then address the algorithmic problems of designing revenue sharing schemes to provide a fair division between sellers of the revenue collected from buyers.
A major conceptual contribution of this work is in showing that even though both clinching ascending auctions and VCG mechanisms achieve the same outcome from a buyer perspective, however, from the perspective of revenue sharing among sellers, clinching ascending auctions are much more informative than VCG auctions
Modified VCG Mechanisms in Combinatorial Auctions with Budget Constraints
I present two modifications of the Vickrey-Clark-Groves mechanism to accommodate bidders' budget constraints in the combinatorial auction setting and show that they are Pareto-Optimal and (partially) incentive compatible in certain domains
Multiplicative Bidding in Online Advertising
In this paper, we initiate the study of the multiplicative bidding language
adopted by major Internet search companies. In multiplicative bidding, the
effective bid on a particular search auction is the product of a base bid and
bid adjustments that are dependent on features of the search (for example, the
geographic location of the user, or the platform on which the search is
conducted). We consider the task faced by the advertiser when setting these bid
adjustments, and establish a foundational optimization problem that captures
the core difficulty of bidding under this language. We give matching
algorithmic and approximation hardness results for this problem; these results
are against an information-theoretic bound, and thus have implications on the
power of the multiplicative bidding language itself. Inspired by empirical
studies of search engine price data, we then codify the relevant restrictions
of the problem, and give further algorithmic and hardness results. Our main
technical contribution is an -approximation for the case of
multiplicative prices and monotone values. We also provide empirical
validations of our problem restrictions, and test our algorithms on real data
against natural benchmarks. Our experiments show that they perform favorably
compared with the baseline.Comment: 25 pages; accepted to EC'1
Modified VCG Mechanisms in Combinatorial Auctions with Budget Constraints
I present two modifications of the Vickrey-Clark-Groves mechanism to accommodate bidders' budget constraints in the combinatorial auction setting and show that they are Pareto-Optimal and (partially) incentive compatible in certain domains