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44
Design and Analysis of the Progressive Second Price auction . . .
, 1999
"... We present the Progressive Second Price auction, a new decentralized mechanism for allocation of variablesize shares of a resource among multiple users. Unlike most mechanisms in the economics litterature, PSP is designed with a very small message space, making it suitable for realtime market pric ..."
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Cited by 47 (8 self)
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We present the Progressive Second Price auction, a new decentralized mechanism for allocation of variablesize shares of a resource among multiple users. Unlike most mechanisms in the economics litterature, PSP is designed with a very small message space, making it suitable for realtime market pricing of communication bandwidth. Under elastic demand, the PSP auction is incentive compatible and stable, in that it has a "truthful"Nash equilibrium where all players bid at prices equal to their marginal valuation of the resource. PSP is economically efficient in that the equilibrium allocation maximizes total user value. With simulations using a protype implementation of the auction game on the Internet, we investigate how convergence times scale with the number of bidders, as well as the tradeoff between engineering and economic efficiency. We also provide a ratedistortion
Truthful mechanism design for multidimensional scheduling via cycle monotonicity
 In Proceedings 8th ACM Conference on Electronic Commerce (EC
, 2007
"... We consider the problem of makespan minimization on m unrelated machines in the context of algorithmic mechanism design, where the machines are the strategic players. This is a multidimensional scheduling domain, and the only known positive results for makespan minimization in such a domain are O(m) ..."
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Cited by 38 (11 self)
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We consider the problem of makespan minimization on m unrelated machines in the context of algorithmic mechanism design, where the machines are the strategic players. This is a multidimensional scheduling domain, and the only known positive results for makespan minimization in such a domain are O(m)approximation truthful mechanisms [22, 20]. We study a wellmotivated special case of this problem, where the processing time of a job on each machine may either be “low ” or “high”, and the low and high values are public and jobdependent. This preserves the multidimensionality of the domain, and generalizes the restrictedmachines (i.e., {pj, ∞}) setting in scheduling. We give a general technique to convert any capproximation algorithm to a 3capproximation truthfulinexpectation mechanism. This is one of the few known results that shows how to export approximation
Market Mechanisms for Network Resource Sharing
, 1999
"... The theme of this thesis is the design and analysis of decentralized and distributed market mechanisms for resource sharing in multiservice networks. The motivation for a marketbased approach is twofold. First, in modern multiservice networks, resources such as bandwidth and buffer space have dif ..."
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Cited by 35 (7 self)
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The theme of this thesis is the design and analysis of decentralized and distributed market mechanisms for resource sharing in multiservice networks. The motivation for a marketbased approach is twofold. First, in modern multiservice networks, resources such as bandwidth and buffer space have different value to different users, and these valuations cannot, in general, be accurately known in advance as users compete against each other for the resources. Second, the network resources themselves are distributed, and often, not subject to any single authority. We present
The Optimal Mechanism for Selling to a BudgetConstrained Buyer
 Journal of Economic Theory
, 2000
"... This paper finds an optimal mechanism for selling a good to a buyer who may be budgetconstrained. We consider a seller with one unit of a good facing a buyer with a quasilinear utility function. If the buyer does not face a binding budget constraint, textbook monopoly pricing is optimal. By contras ..."
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Cited by 34 (3 self)
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This paper finds an optimal mechanism for selling a good to a buyer who may be budgetconstrained. We consider a seller with one unit of a good facing a buyer with a quasilinear utility function. If the buyer does not face a binding budget constraint, textbook monopoly pricing is optimal. By contrast, the possibility of a binding budget constraint can make it optimal for the seller to use nonlinear pricing, to commit to a declining price sequence, to require the buyer to disclose his budget, or to offer financing. Journal of Economic Literature Classification Numbers:
Multiparameter mechanism design and sequential posted pricing
 CoRR
"... We study the classic mathematical economics problem of Bayesian optimal mechanism design where a principal aims to optimize expected revenue when allocating resources to selfinterested agents with preferences drawn from a known distribution. In single parameter settings (i.e., where each agent’s pr ..."
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Cited by 30 (4 self)
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We study the classic mathematical economics problem of Bayesian optimal mechanism design where a principal aims to optimize expected revenue when allocating resources to selfinterested agents with preferences drawn from a known distribution. In single parameter settings (i.e., where each agent’s preference is given by a single private value for being served and zero for not being served) this problem is solved [20]. Unfortunately, these single parameter optimal mechanisms are impractical and rarely employed [1], and furthermore the underlying economic theory fails to generalize to the important, relevant, and unsolved multidimensional setting (i.e., where each agent’s preference is given by multiple values for each of the multiple services available) [25]. In contrast to the theory of optimal mechanisms we develop a theory of sequential posted price mechanisms, where agents in sequence are offered takeitorleaveit prices. We prove that these
Efficient mechanism design
, 1998
"... We study Bayesian mechanism design in situations where agents ’ information may be multidimensional, concentrating on mechanisms that lead to efficient allocations. Our main result is that a generalization of the wellknown VickreyClarkeGroves mechanism maximizes the planner’s “revenue ” among al ..."
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Cited by 30 (0 self)
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We study Bayesian mechanism design in situations where agents ’ information may be multidimensional, concentrating on mechanisms that lead to efficient allocations. Our main result is that a generalization of the wellknown VickreyClarkeGroves mechanism maximizes the planner’s “revenue ” among all efficient mechanisms. This result is then used to study multiple object auctions in situations where bidders have privately known “demand curves” and extended to include situations with complementarities across objects or externalities across bidders. We also illustrate how the main result may be used to analyze the possibility of allocating both private and public goods efÞciently when budget balance considerations are important. The generalized VCG mechanism, therefore, serves to unify many results in mechansim design theory. 1
Sequential posted pricing and multiparameter mechanism design
 Proc. of 42 nd ACM STOC
"... We consider the classical mathematical economics problem of Bayesian optimal mechanism design where a principal aims to optimize a given objective when allocating resources to selfinterested agents. In singleparameter settings (where each agent preference is given by a private value for being allo ..."
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Cited by 16 (4 self)
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We consider the classical mathematical economics problem of Bayesian optimal mechanism design where a principal aims to optimize a given objective when allocating resources to selfinterested agents. In singleparameter settings (where each agent preference is given by a private value for being allocated the resource and zero for not being allocated) this problem is solved [19]. While this economic solution is tractable whenever the noneconomic optimization problem is tractable, it is complicated enough that it is rarely employed. Moreover, the techniques do not seem to generalize to multiparameter settings. Our first result is that for general product distributions on agent preferences and resource allocation problems that satisfy matroid properties (e.g., multiunit auctions, matchings, spanning trees), sequential posted price mechanisms, where agents are approached inturn and offered a precomputed takeitorleaveit offer, are at most a 4approximation to the optimal singleround mechanism. Furthermore, a suitable sequence of prices can be effectively computed by sampling the agents ’ distributional preferences. Notably, the analysis of this sequential posted price mechanism can be extended to give approximation mechanisms for the unsolved multiparameter setting. In stark contrast to the singleparameter setting, in multiparameter settings there is no general description or tractable implementation of optimal mechanisms. For decades, this unanswered issue has been widely considered one of the most important in the economic theory on mechanism design. We focus on
Sequential Screening
 REVIEW OF ECONOMIC STUDIES
, 1998
"... We present a model of price discrimination where a monopolist faces a consumer who is privately informed about the distribution of his valuation for an indivisible unit of good but has yet to learn privately the actual valuation. The monopolist sequentially screens the consumer with a menu of contr ..."
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Cited by 15 (0 self)
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We present a model of price discrimination where a monopolist faces a consumer who is privately informed about the distribution of his valuation for an indivisible unit of good but has yet to learn privately the actual valuation. The monopolist sequentially screens the consumer with a menu of contracts: the consumer selfselects once by choosing a contract and then selfselects again when he learns the actual valuation. A deterministic sequential mechanism is a menu of refund contracts, each consisting of an advance payment and a refund amount in case of no consumption, but sequential mechanisms may involve randomization. We characterize the optimal sequential mechanism when some consumer types are more eager in the sense of firstorder stochastic dominance, and when some types face greater valuation uncertainty in the sense of meanpreservingspread. We show that it can be optimal to subsidize consumer types with smaller valuation uncertainty (through low refund, as in airplane ticket pricing) in order to reduce the rent to those with greater uncertainty. The size of distortion depends both on the type distribution and on how informative the consumer's initial private knowledge is about his valuation, but not on how much he initially knows about the valuation per se.