Simple versus optimal mechanisms

Jason D Hartline, Tim Roughgarden

Research output: Chapter in Book/Report/Conference proceedingConference contribution

158 Scopus citations

Abstract

The monopolist's theory of optimal single-item auctions for agents with independent private values can be summarized by two statements. The first is from Myerson [8]: the optimal auction is Vickrey with a reserve price. The second is from Bulow and Klemperer [1]: it is better to recruit one more bidder and run the Vickrey auction than to run the optimal auction. These results hold for single-item auctions under the assumption that the agents' valuations are independently and identically drawn from a distribution that satisfies a natural (and prevalent) regularity condition. These fundamental guarantees for the Vickrey auction fail to hold in general single-parameter agent mechanism design problems. We give precise (and weak) conditions under which approximate analogs of these two results hold, thereby demonstrating that simple mechanisms remain almost optimal in quite general single-parameter agent settings.

Original languageEnglish (US)
Title of host publicationEC'09 - Proceedings of the 2009 ACM Conference on Electronic Commerce
Pages225-234
Number of pages10
DOIs
StatePublished - Dec 1 2009
Event2009 ACM Conference on Electronic Commerce, EC'09 - Stanford, CA, United States
Duration: Jul 6 2009Jul 10 2009

Publication series

NameProceedings of the ACM Conference on Electronic Commerce

Other

Other2009 ACM Conference on Electronic Commerce, EC'09
Country/TerritoryUnited States
CityStanford, CA
Period7/6/097/10/09

Keywords

  • Auctions
  • Optimal auctions
  • Revenue-maximization
  • VCG mechanism
  • Vickrey auction

ASJC Scopus subject areas

  • Software
  • Computer Science Applications
  • Computer Networks and Communications

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