PoA of Simple Auctions with Interdependent Values

Alon Eden, Michal Feldman, Inbal Talgam-Cohen, Ori Zviran

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

6 Scopus citations

Abstract

We expand the literature on the price of anarchy (PoA) of simultaneous item auctions by considering settings with correlated values; we do this via the fundamental economic model of interdependent values (IDV). It is well-known that in multi-item settings with private values, correlated values can lead to bad PoA, which can be polynomially large in the number of agents n. In the more general model of IDV, we show that the PoA can be polynomially large even in single-item settings. On the positive side, we identify a natural condition on information dispersion in the market, which enables good PoA guarantees. Under this condition, we show that for single-item settings, the PoA of standard mechanisms degrades gracefully. For settings with multiple items we show a separation between two domains: If there are more buyers, we devise a new simultaneous item auction with good PoA, under limited information asymmetry. To the best of our knowledge, this is the first positive PoA result for correlated values in multi-item settings. The main technical difficulty in establishing this result is that the standard tool for establishing PoA results — the smoothness framework — is unsuitable for IDV settings, and so we must introduce new techniques to address the unique challenges imposed by such settings. In the domain of more items, we establish impossibility results even for surprisingly simple scenarios.

Original languageAmerican English
Title of host publication35th AAAI Conference on Artificial Intelligence, AAAI 2021
PublisherAssociation for the Advancement of Artificial Intelligence
Pages5321-5329
Number of pages9
ISBN (Electronic)9781713835974
StatePublished - 2021
Externally publishedYes
Event35th AAAI Conference on Artificial Intelligence, AAAI 2021 - Virtual, Online
Duration: 2 Feb 20219 Feb 2021

Publication series

Name35th AAAI Conference on Artificial Intelligence, AAAI 2021
Volume6B

Conference

Conference35th AAAI Conference on Artificial Intelligence, AAAI 2021
CityVirtual, Online
Period2/02/219/02/21

Bibliographical note

Publisher Copyright:
Copyright © 2021, Association for the Advancement of Artificial Intelligence (www.aaai.org). All rights reserved.

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