Sponsored Search, Market Equilibria, and the Hungarian Method

Matching markets play a prominent role in economic theory. A prime example of such a market is the sponsored search market. Here, as in other markets of that kind, market equilibria correspond to feasible, envy free, and bidder optimal outcomes. For settings without budgets such an outcome always exists and can be computed in polynomial-time by the so-called Hungarian Method. Moreover, every mechanism that computes such an outcome is incentive compatible. We show that the Hungarian Method can be modified so that it finds a feasible, envy free, and bidder optimal outcome for settings with budgets. We also show that in settings with budgets no mechanism that computes such an outcome can be incentive compatible for all inputs. For inputs in general position, however, the presented mechanism---as any other mechanism that computes such an outcome for settings with budgets---is incentive compatible

Decremental Single-Source Shortest Paths on Undirected Graphs in Near-Linear Total Update Time

In the decremental single-source shortest paths (SSSP) problem we want to maintain the distances between a given source node $s$ and every other node in an $n$-node $m$-edge graph $G$ undergoing edge deletions. While its static counterpart can be solved in near-linear time, this decremental problem is much more challenging even in the undirected unweighted case. In this case, the classic $O(mn)$ total update time of Even and Shiloach [JACM 1981] has been the fastest known algorithm for three decades. At the cost of a $(1+\epsilon)$-approximation factor, the running time was recently improved to $n^{2+o(1)}$ by Bernstein and Roditty [SODA 2011]. In this paper, we bring the running time down to near-linear: We give a $(1+\epsilon)$-approximation algorithm with $m^{1+o(1)}$ expected total update time, thus obtaining near-linear time. Moreover, we obtain $m^{1+o(1)} \log W$ time for the weighted case, where the edge weights are integers from $1$ to $W$. The only prior work on weighted graphs in $o(m n)$ time is the $m n^{0.9 + o(1)}$-time algorithm by Henzinger et al. [STOC 2014, ICALP 2015] which works for directed graphs with quasi-polynomial edge weights. The expected running time bound of our algorithm holds against an oblivious adversary. In contrast to the previous results which rely on maintaining a sparse emulator, our algorithm relies on maintaining a so-called sparse $(h, \epsilon)$-hop set introduced by Cohen [JACM 2000] in the PRAM literature. An $(h, \epsilon)$-hop set of a graph $G=(V, E)$ is a set $F$ of weighted edges such that the distance between any pair of nodes in $G$ can be $(1+\epsilon)$-approximated by their $h$-hop distance (given by a path containing at most $h$ edges) on $G'=(V, E\cup F)$. Our algorithm can maintain an $(n^{o(1)}, \epsilon)$-hop set of near-linear size in near-linear time under edge deletions.Comment: Accepted to Journal of the ACM. A preliminary version of this paper was presented at the 55th IEEE Symposium on Foundations of Computer Science (FOCS 2014). Abstract shortened to respect the arXiv limit of 1920 character

Valuation Compressions in VCG-Based Combinatorial Auctions

The focus of classic mechanism design has been on truthful direct-revelation mechanisms. In the context of combinatorial auctions the truthful direct-revelation mechanism that maximizes social welfare is the VCG mechanism. For many valuation spaces computing the allocation and payments of the VCG mechanism, however, is a computationally hard problem. We thus study the performance of the VCG mechanism when bidders are forced to choose bids from a subspace of the valuation space for which the VCG outcome can be computed efficiently. We prove improved upper bounds on the welfare loss for restrictions to additive bids and upper and lower bounds for restrictions to non-additive bids. These bounds show that the welfare loss increases in expressiveness. All our bounds apply to equilibrium concepts that can be computed in polynomial time as well as to learning outcomes