Destroy to save


de Clippel, Geoffroy, Naroditskiy, Victor, Polukarov, Maria, Greenwald, Amy and Jennings, Nicholas R. (2012) Destroy to save Games and Economic Behavior, 86, pp. 392-404. (doi:10.1016/j.geb.2012.11.002).

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Description/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%

Item Type: Article
Digital Object Identifier (DOI): doi:10.1016/j.geb.2012.11.002
ISSNs: 0899-8256 (print)
Keywords: redistribution mechanisms, budget balance, inefficient allocation
Subjects:

Organisations: Agents, Interactions & Complexity
ePrint ID: 345503
Date :
Date Event
23 November 2012e-pub ahead of print
July 2014Published
Date Deposited: 22 Nov 2012 05:38
Last Modified: 17 Apr 2017 16:21
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/345503

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