33,080 research outputs found
Budget Feasible Mechanism Design: From Prior-Free to Bayesian
Budget feasible mechanism design studies procurement combinatorial auctions
where the sellers have private costs to produce items, and the
buyer(auctioneer) aims to maximize a social valuation function on subsets of
items, under the budget constraint on the total payment. One of the most
important questions in the field is "which valuation domains admit truthful
budget feasible mechanisms with `small' approximations (compared to the social
optimum)?" Singer showed that additive and submodular functions have such
constant approximations. Recently, Dobzinski, Papadimitriou, and Singer gave an
O(log^2 n)-approximation mechanism for subadditive functions; they also
remarked that: "A fundamental question is whether, regardless of computational
constraints, a constant-factor budget feasible mechanism exists for subadditive
functions."
We address this question from two viewpoints: prior-free worst case analysis
and Bayesian analysis. For the prior-free framework, we use an LP that
describes the fractional cover of the valuation function; it is also connected
to the concept of approximate core in cooperative game theory. We provide an
O(I)-approximation mechanism for subadditive functions, via the worst case
integrality gap I of LP. This implies an O(log n)-approximation for subadditive
valuations, O(1)-approximation for XOS valuations, and for valuations with a
constant I. XOS valuations are an important class of functions that lie between
submodular and subadditive classes. We give another polynomial time O(log
n/loglog n) sub-logarithmic approximation mechanism for subadditive valuations.
For the Bayesian framework, we provide a constant approximation mechanism for
all subadditive functions, using the above prior-free mechanism for XOS
valuations as a subroutine. Our mechanism allows correlations in the
distribution of private information and is universally truthful.Comment: to appear in STOC 201
Average-case Approximation Ratio of Scheduling without Payments
Apart from the principles and methodologies inherited from Economics and Game
Theory, the studies in Algorithmic Mechanism Design typically employ the
worst-case analysis and approximation schemes of Theoretical Computer Science.
For instance, the approximation ratio, which is the canonical measure of
evaluating how well an incentive-compatible mechanism approximately optimizes
the objective, is defined in the worst-case sense. It compares the performance
of the optimal mechanism against the performance of a truthful mechanism, for
all possible inputs.
In this paper, we take the average-case analysis approach, and tackle one of
the primary motivating problems in Algorithmic Mechanism Design -- the
scheduling problem [Nisan and Ronen 1999]. One version of this problem which
includes a verification component is studied by [Koutsoupias 2014]. It was
shown that the problem has a tight approximation ratio bound of (n+1)/2 for the
single-task setting, where n is the number of machines. We show, however, when
the costs of the machines to executing the task follow any independent and
identical distribution, the average-case approximation ratio of the mechanism
given in [Koutsoupias 2014] is upper bounded by a constant. This positive
result asymptotically separates the average-case ratio from the worst-case
ratio, and indicates that the optimal mechanism for the problem actually works
well on average, although in the worst-case the expected cost of the mechanism
is Theta(n) times that of the optimal cost
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
Optimal Auctions vs. Anonymous Pricing
For selling a single item to agents with independent but non-identically
distributed values, the revenue optimal auction is complex. With respect to it,
Hartline and Roughgarden (2009) showed that the approximation factor of the
second-price auction with an anonymous reserve is between two and four. We
consider the more demanding problem of approximating the revenue of the ex ante
relaxation of the auction problem by posting an anonymous price (while supplies
last) and prove that their worst-case ratio is e. As a corollary, the
upper-bound of anonymous pricing or anonymous reserves versus the optimal
auction improves from four to . We conclude that, up to an factor,
discrimination and simultaneity are unimportant for driving revenue in
single-item auctions.Comment: 19 pages, 6 figures, To appear in 56th Annual IEEE Symposium on
Foundations of Computer Science (FOCS 2015
Designing cost-sharing methods for Bayesian games
We study the design of cost-sharing protocols for two fundamental resource allocation problems, the Set Cover and the Steiner Tree Problem, under environments of incomplete information (Bayesian model). Our objective is to design protocols where the worst-case Bayesian Nash equilibria, have low cost, i.e. the Bayesian Price of Anarchy (PoA) is minimized. Although budget balance is a very natural requirement, it puts considerable restrictions on the design space, resulting in high PoA. We propose an alternative, relaxed requirement called budget balance in the equilibrium (BBiE).We show an interesting connection between algorithms for Oblivious Stochastic optimization problems and cost-sharing design with low PoA. We exploit this connection for both problems and we enforce approximate solutions of the stochastic problem, as Bayesian Nash equilibria, with the same guarantees on the PoA. More interestingly, we show how to obtain the same bounds on the PoA, by using anonymous posted prices which are desirable because they are easy to implement and, as we show, induce dominant strategies for the players
Randomization beats Second Price as a Prior-Independent Auction
Designing revenue optimal auctions for selling an item to symmetric
bidders is a fundamental problem in mechanism design. Myerson (1981) shows that
the second price auction with an appropriate reserve price is optimal when
bidders' values are drawn i.i.d. from a known regular distribution. A
cornerstone in the prior-independent revenue maximization literature is a
result by Bulow and Klemperer (1996) showing that the second price auction
without a reserve achieves of the optimal revenue in the worst case.
We construct a randomized mechanism that strictly outperforms the second
price auction in this setting. Our mechanism inflates the second highest bid
with a probability that varies with . For two bidders we improve the
performance guarantee from to of the optimal revenue. We also
resolve a question in the design of revenue optimal mechanisms that have access
to a single sample from an unknown distribution. We show that a randomized
mechanism strictly outperforms all deterministic mechanisms in terms of worst
case guarantee
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