Economic efficiency requires interaction

Shahar Dobzinski*, Noam Nisan, Sigal Oren

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


We study the necessity of interaction between individuals for obtaining approximately efficient economic allocations. We view this as a formalization of Hayek's classic point of view that focuses on the information transfer advantages that markets have relative to centralized planning. We study two settings: combinatorial auctions with unit demand bidders (bipartite matching) and combinatorial auctions with subadditive bidders. In both settings we prove that non-interactive protocols require exponentially larger communication costs than do interactive ones, even ones that only use a modest amount of interaction.

Original languageAmerican English
Pages (from-to)589-608
Number of pages20
JournalGames and Economic Behavior
StatePublished - Nov 2019

Bibliographical note

Publisher Copyright:
© 2018


  • Combinatorial auctions
  • Communication complexity


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