Limitations of VCG-based mechanisms

Shahar Dobzinski*, Noam Nisan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

13 Scopus citations


We consider computationally-efficient truthful mechanisms that use the VCG payment scheme, and study how well they can approximate the social welfare in auction settings. We present a novel technique for setting lower bounds on the approximation ratio of this type of mechanisms. Our technique is based on setting lower bounds on the communication complexity by analyzing combinatorial properties of the algorithms. Specifically, for combinatorial auctions among submodular (and thus also subadditive) bidders we prove an ω(m1/6)lower bound, which is close to the known upper bound of O(m1/2), and qualitatively higher than the constant factor approximation possible from a purely computational point of view.

Original languageAmerican English
Pages (from-to)379-396
Number of pages18
Issue number4
StatePublished - Nov 2011

Bibliographical note

Funding Information:
Acknowledgements. We thank Liad Blumrosen and Nikhil Devanur for pointing out that the algorithms of [3] and [2] are maximal in range. We also thank Liad Blumrosen for comments on an earlier draft of this paper. This research was supported by a grant from the Israeli Academy of Sciences. The first author is supported by the Adams Fellowship Program of the Israel Academy of Sciences and Humanities.


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