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An Expressive Mechanism for Auctions on the Web

An Expressive Mechanism for Auctions on the Web An Expressive Mechanism for Auctions on the Web ¨ PAUL DUTTING, London School of Economics and Political Science MONIKA HENZINGER, University of Vienna INGMAR WEBER, Qatar Computing Research Institute Auctions are widely used on the Web. Applications range from sponsored search to platforms such as eBay. In these and in many other applications the auctions in use are single-/multi-item auctions with unit demand. The main drawback of standard mechanisms for this type of auctions, such as VCG and GSP, is the limited expressiveness that they offer to the bidders. The General Auction Mechanism (GAM) of Aggarwal et al. [2009] takes a first step toward addressing the problem of limited expressiveness by computing a bidder optimal, envy-free outcome for linear utility functions with identical slopes and a single discontinuity per bidder-item pair. We show that in many practical situations this does not suffice to adequately model the preferences of the bidders, and we overcome this problem by presenting the first mechanism for piecewise linear utility functions with nonidentical slopes and multiple discontinuities. Our mechanism runs in polynomial time. Like GAM it is incentive compatible for inputs that fulfill a certain nondegeneracy assumption, but our requirement is more general than http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png ACM Transactions on Economics and Computation Association for Computing Machinery

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References (52)

Publisher
Association for Computing Machinery
Copyright
Copyright © 2015 by ACM Inc.
ISSN
2167-8375
DOI
10.1145/2716312
Publisher site
See Article on Publisher Site

Abstract

An Expressive Mechanism for Auctions on the Web ¨ PAUL DUTTING, London School of Economics and Political Science MONIKA HENZINGER, University of Vienna INGMAR WEBER, Qatar Computing Research Institute Auctions are widely used on the Web. Applications range from sponsored search to platforms such as eBay. In these and in many other applications the auctions in use are single-/multi-item auctions with unit demand. The main drawback of standard mechanisms for this type of auctions, such as VCG and GSP, is the limited expressiveness that they offer to the bidders. The General Auction Mechanism (GAM) of Aggarwal et al. [2009] takes a first step toward addressing the problem of limited expressiveness by computing a bidder optimal, envy-free outcome for linear utility functions with identical slopes and a single discontinuity per bidder-item pair. We show that in many practical situations this does not suffice to adequately model the preferences of the bidders, and we overcome this problem by presenting the first mechanism for piecewise linear utility functions with nonidentical slopes and multiple discontinuities. Our mechanism runs in polynomial time. Like GAM it is incentive compatible for inputs that fulfill a certain nondegeneracy assumption, but our requirement is more general than

Journal

ACM Transactions on Economics and ComputationAssociation for Computing Machinery

Published: Dec 7, 2015

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