On the Inefficiency of the Uniform Price Auction

We present our results on Uniform Price Auctions, one of the standard sealed-bid multi-unit auction formats, for selling multiple identical units of a single good to multi-demand bidders. Contrary to the truthful and economically efficient multi-unit Vickrey auction, the Uniform Price Auction encourages strategic bidding and is socially inefficient in general. The uniform pricing rule is, however, widely popular by its appeal to the natural anticipation, that identical items should be identically priced. In this work we study equilibria of the Uniform Price Auction for bidders with (symmetric) submodular valuation functions, over the number of units that they win. We investigate pure Nash equilibria of the auction in undominated strategies; we produce a characterization of these equilibria that allows us to prove that a fraction 1-1/e of the optimum social welfare is always recovered in undominated pure Nash equilibrium -- and this bound is essentially tight. Subsequently, we study the auction under the incomplete information setting and prove a bound of 4-2/k on the economic inefficiency of (mixed) Bayes Nash equilibria that are supported by undominated strategies.Comment: Additions and Improvements upon SAGT 2012 results (and minor corrections on the previous version

Discrete Strategies in Keyword Auctions and Their Inefficiency for Locally Aware Bidders

We study formally discrete bidding strategies for the game induced by the Generalized Second Price keyword auction mechanism. Such strategies have seen experimental evaluation in the recent literature as parts of iterative best response procedures, which have been shown not to converge. We give a detailed definition of iterative best response under these strategies and, under appropriate discretization of the players' strategy spaces we find that the discretized configurations space {\em contains} socially optimal pure Nash equilibria. We cast the strategies under a new light, by studying their performance for bidders that act based on local information; we prove bounds for the worst-case ratio of the social welfare of locally stable configurations, relative to the socially optimum welfare

Mechanisms for Multi-unit Combinatorial Auctions with a Few Distinct Goods

We design and analyze deterministic truthful approximation mechanisms for multi-unit Combinatorial Auctions involving only a constant number of distinct goods, each in arbitrary limited supply. Prospective buyers (bidders) have preferences over multisets of items, i.e., for more than one unit per distinct good. Our objective is to determine allocations of multisets that maximize the Social Welfare. Our main results are for multi-minded and submodular bidders. In the first setting each bidder has a positive value for being allocated one multiset from a prespecified demand set of alternatives. In the second setting each bidder is associated to a submodular valuation function that defines his value for the multiset he is allocated. For multi-minded bidders, we design a truthful Fptas that fully optimizes the Social Welfare, while violating the supply constraints on goods within factor (1 + ), for any fixed > 0 (i.e., the approximation applies to the constraints and not to the Social Welfare). This result is best possible, in that full optimization is impossible without violating the supply constraints. For submodular bidders, we obtain a Ptas that approximates the optimum Social Welfare within factor (1 + ), for any fixed > 0, without violating the supply constraints. This result is best possible as well. Our allocation algorithms are Maximal-in-Range and yield truthful mechanisms, when paired with Vickrey-Clarke-Groves payments

Labeled Traveling Salesman Problems: Complexity and approximation

We consider labeled Traveling Salesman Problems, defined upon a complete graph of n vertices with colored edges. The objective is to find a tour of maximum or minimum number of colors. We derive results regarding hardness of approximation and analyze approximation algorithms, for both versions of the problem. For the maximization version we give a $1/2$-approximation algorithm based on local improvements and show that the problem is APX-hard. For the minimization version, we show that it is not approximable within $n^{1-\epsilon}$ for any fixed $\epsilon>0$. When every color appears in the graph at most $r$ times and $r$ is an increasing function of $n$, the problem is shown not to be approximable within factor $O(r^{1-\epsilon})$. For fixed constant $r$ we analyze a polynomial-time $(r +H_r)/2$ approximation algorithm, where $H_r$ is the $r$-th harmonic number, and prove APX-hardness for $r = 2$. For all of the analyzed algorithms we exhibit tightness of their analysis by provision of appropriate worst-case instances

On the inefficiency of equilibria in linear bottleneck congestion games

We study the inefficiency of equilibrium outcomes in bottleneck congestion games. These games model situations in which strategic players compete for a limited number of facilities. Each player allocates his weight to a (feasible) subset of the facilities with the goal to minimize the maximum (weight-dependent) latency that he experiences on any of these facilities. We derive upper and (asymptotically) matching lower bounds on the (strong) price of anarchy of linear bottleneck congestion games for a natural load balancing social cost objective (i.e., minimize the maximum latency of a facility). We restrict our studies to linear latency functions. Linear bottleneck congestion games still constitute a rich class of games and generalize, for example, load balancing games with identical or uniformly related machines with or without restricted assignments