141,925 research outputs found
A Truthful Mechanism for the Generalized Assignment Problem
We propose a truthful-in-expectation, -approximation mechanism for a
strategic variant of the generalized assignment problem (GAP). In GAP, a set of
items has to be optimally assigned to a set of bins without exceeding the
capacity of any singular bin. In the strategic variant of the problem we study,
values for assigning items to bins are the private information of bidders and
the mechanism should provide bidders with incentives to truthfully report their
values. The approximation ratio of the mechanism is a significant improvement
over the approximation ratio of the existing truthful mechanism for GAP.
The proposed mechanism comprises a novel convex optimization program as the
allocation rule as well as an appropriate payment rule. To implement the convex
program in polynomial time, we propose a fractional local search algorithm
which approximates the optimal solution within an arbitrarily small error
leading to an approximately truthful-in-expectation mechanism. The presented
algorithm improves upon the existing optimization algorithms for GAP in terms
of simplicity and runtime while the approximation ratio closely matches the
best approximation ratio given for GAP when all inputs are publicly known.Comment: 18 pages, Earlier version accepted at WINE 201
Revenue Maximization and Ex-Post Budget Constraints
We consider the problem of a revenue-maximizing seller with m items for sale
to n additive bidders with hard budget constraints, assuming that the seller
has some prior distribution over bidder values and budgets. The prior may be
correlated across items and budgets of the same bidder, but is assumed
independent across bidders. We target mechanisms that are Bayesian Incentive
Compatible, but that are ex-post Individually Rational and ex-post budget
respecting. Virtually no such mechanisms are known that satisfy all these
conditions and guarantee any revenue approximation, even with just a single
item. We provide a computationally efficient mechanism that is a
-approximation with respect to all BIC, ex-post IR, and ex-post budget
respecting mechanisms. Note that the problem is NP-hard to approximate better
than a factor of 16/15, even in the case where the prior is a point mass
\cite{ChakrabartyGoel}. We further characterize the optimal mechanism in this
setting, showing that it can be interpreted as a distribution over virtual
welfare maximizers.
We prove our results by making use of a black-box reduction from mechanism to
algorithm design developed by \cite{CaiDW13b}. Our main technical contribution
is a computationally efficient -approximation algorithm for the algorithmic
problem that results by an application of their framework to this problem. The
algorithmic problem has a mixed-sign objective and is NP-hard to optimize
exactly, so it is surprising that a computationally efficient approximation is
possible at all. In the case of a single item (), the algorithmic problem
can be solved exactly via exhaustive search, leading to a computationally
efficient exact algorithm and a stronger characterization of the optimal
mechanism as a distribution over virtual value maximizers
Budget Feasible Mechanisms
We study a novel class of mechanism design problems in which the outcomes are
constrained by the payments. This basic class of mechanism design problems
captures many common economic situations, and yet it has not been studied, to
our knowledge, in the past. We focus on the case of procurement auctions in
which sellers have private costs, and the auctioneer aims to maximize a utility
function on subsets of items, under the constraint that the sum of the payments
provided by the mechanism does not exceed a given budget. Standard mechanism
design ideas such as the VCG mechanism and its variants are not applicable
here. We show that, for general functions, the budget constraint can render
mechanisms arbitrarily bad in terms of the utility of the buyer. However, our
main result shows that for the important class of submodular functions, a
bounded approximation ratio is achievable. Better approximation results are
obtained for subclasses of the submodular functions. We explore the space of
budget feasible mechanisms in other domains and give a characterization under
more restricted conditions
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