Destroy to save
Destroy to save
We study the problem of allocating m identical items among n>m agents with unit demand and private value for consuming the good. We allow payments and focus on dominant-strategy implementation. In the absence of an auctioneer who can absorb payments collected from the agents, the payments must be burnt to support dominant-strategy implementation.
Recent work modified the classic VCG mechanism by redistributing as much of the payments as possible back to the agents while still satisfying incentive constraints. This approach guarantees allocative efficiency, but in some cases a large percentage of social welfare is lost. In this paper, we provide a mechanism that is not allocatively efficient but is instead guaranteed to achieve at least 80% of the social welfare as n??. Moreover, in the extreme case of m=n?1 where VCG-based mechanisms provide zero welfare, the percentage of social welfare maintained by our mechanism asymptotically approaches 100%
redistribution mechanisms, budget balance, inefficient allocation
392-404
de Clippel, Geoffroy
c1437c46-20de-4baf-b42d-cc4413bc34ce
Naroditskiy, Victor
8881263c-ee85-49f2-b658-99c31b490e1d
Polukarov, Maria
bd2f0623-9e8a-465f-8b29-851387a64740
Greenwald, Amy
e2e9560f-9feb-4aa8-bce3-7921643fcd8f
Jennings, Nicholas R.
ab3d94cc-247c-4545-9d1e-65873d6cdb30
July 2014
de Clippel, Geoffroy
c1437c46-20de-4baf-b42d-cc4413bc34ce
Naroditskiy, Victor
8881263c-ee85-49f2-b658-99c31b490e1d
Polukarov, Maria
bd2f0623-9e8a-465f-8b29-851387a64740
Greenwald, Amy
e2e9560f-9feb-4aa8-bce3-7921643fcd8f
Jennings, Nicholas R.
ab3d94cc-247c-4545-9d1e-65873d6cdb30
de Clippel, Geoffroy, Naroditskiy, Victor, Polukarov, Maria, Greenwald, Amy and Jennings, Nicholas R.
(2014)
Destroy to save.
Games and Economic Behavior, 86, .
(doi:10.1016/j.geb.2012.11.002).
Abstract
We study the problem of allocating m identical items among n>m agents with unit demand and private value for consuming the good. We allow payments and focus on dominant-strategy implementation. In the absence of an auctioneer who can absorb payments collected from the agents, the payments must be burnt to support dominant-strategy implementation.
Recent work modified the classic VCG mechanism by redistributing as much of the payments as possible back to the agents while still satisfying incentive constraints. This approach guarantees allocative efficiency, but in some cases a large percentage of social welfare is lost. In this paper, we provide a mechanism that is not allocatively efficient but is instead guaranteed to achieve at least 80% of the social welfare as n??. Moreover, in the extreme case of m=n?1 where VCG-based mechanisms provide zero welfare, the percentage of social welfare maintained by our mechanism asymptotically approaches 100%
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e-pub ahead of print date: 23 November 2012
Published date: July 2014
Keywords:
redistribution mechanisms, budget balance, inefficient allocation
Organisations:
Agents, Interactions & Complexity
Identifiers
Local EPrints ID: 345503
URI: http://eprints.soton.ac.uk/id/eprint/345503
ISSN: 0899-8256
PURE UUID: 9538b10e-66db-4a67-ab67-3ae5b0724f49
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Date deposited: 22 Nov 2012 05:38
Last modified: 14 Mar 2024 12:25
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Contributors
Author:
Geoffroy de Clippel
Author:
Victor Naroditskiy
Author:
Maria Polukarov
Author:
Amy Greenwald
Author:
Nicholas R. Jennings
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