40 research outputs found
Social welfare and profit maximization from revealed preferences
Consider the seller's problem of finding optimal prices for her
(divisible) goods when faced with a set of consumers, given that she can
only observe their purchased bundles at posted prices, i.e., revealed
preferences. We study both social welfare and profit maximization with revealed
preferences. Although social welfare maximization is a seemingly non-convex
optimization problem in prices, we show that (i) it can be reduced to a dual
convex optimization problem in prices, and (ii) the revealed preferences can be
interpreted as supergradients of the concave conjugate of valuation, with which
subgradients of the dual function can be computed. We thereby obtain a simple
subgradient-based algorithm for strongly concave valuations and convex cost,
with query complexity , where is the additive
difference between the social welfare induced by our algorithm and the optimum
social welfare. We also study social welfare maximization under the online
setting, specifically the random permutation model, where consumers arrive
one-by-one in a random order. For the case where consumer valuations can be
arbitrary continuous functions, we propose a price posting mechanism that
achieves an expected social welfare up to an additive factor of
from the maximum social welfare. Finally, for profit maximization (which may be
non-convex in simple cases), we give nearly matching upper and lower bounds on
the query complexity for separable valuations and cost (i.e., each good can be
treated independently)
Revealed Preference Dimension via Matrix Sign Rank
Given a data-set of consumer behaviour, the Revealed Preference Graph
succinctly encodes inferred relative preferences between observed outcomes as a
directed graph. Not all graphs can be constructed as revealed preference graphs
when the market dimension is fixed. This paper solves the open problem of
determining exactly which graphs are attainable as revealed preference graphs
in -dimensional markets. This is achieved via an exact characterization
which closely ties the feasibility of the graph to the Matrix Sign Rank of its
signed adjacency matrix. The paper also shows that when the preference
relations form a partially ordered set with order-dimension , the graph is
attainable as a revealed preference graph in a -dimensional market.Comment: Submitted to WINE `1