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Destroy to save

de Clippel, Geoffroy, Naroditskiy, Victor, Polukarov, Maria, Greenwald, Amy and Jennings, Nicholas R. (2014) Destroy to save Games and Economic Behavior, 86, pp. 392-404. (doi:10.1016/j.geb.2012.11.002).

Record type: Article

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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More information

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

Catalogue record

Date deposited: 22 Nov 2012 05:38
Last modified: 18 Jul 2017 05:09

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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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