TY - JOUR
T1 - The Power of Fair Pricing Mechanisms
AU - Chung, Christine
AU - Ligett, Katrina
AU - Pruhs, Kirk
AU - Roth, Aaron
N1 - Publisher Copyright:
© Springer Science+Business Media, LLC 2011.
PY - 2012/7
Y1 - 2012/7
N2 - We explore the revenue capabilities of truthful, monotone (“fair”) allocation and pricing functions for resource-constrained auction mechanisms within a general framework that encompasses unlimited supply auctions, knapsack auctions, and auctions with general non-decreasing convex production cost functions.We study and compare the revenue obtainable in each fair pricing scheme to the profit obtained by the ideal omniscient multi-price auction. We show that for capacitated knapsack auctions, no constant pricing scheme can achieve any approximation to the optimal profit, but proportional pricing is as powerful as general monotone pricing. In addition, for auction settings with arbitrary bounded non-decreasing convex production cost functions, we present a proportional pricing mechanism which achieves a polylogarithmic approximation. Unlike existing approaches, all of our mechanisms have fair (monotone) prices, and all of our competitive analysis is with respect to the optimal profit extraction.
AB - We explore the revenue capabilities of truthful, monotone (“fair”) allocation and pricing functions for resource-constrained auction mechanisms within a general framework that encompasses unlimited supply auctions, knapsack auctions, and auctions with general non-decreasing convex production cost functions.We study and compare the revenue obtainable in each fair pricing scheme to the profit obtained by the ideal omniscient multi-price auction. We show that for capacitated knapsack auctions, no constant pricing scheme can achieve any approximation to the optimal profit, but proportional pricing is as powerful as general monotone pricing. In addition, for auction settings with arbitrary bounded non-decreasing convex production cost functions, we present a proportional pricing mechanism which achieves a polylogarithmic approximation. Unlike existing approaches, all of our mechanisms have fair (monotone) prices, and all of our competitive analysis is with respect to the optimal profit extraction.
UR - http://www.scopus.com/inward/record.url?scp=85028147282&partnerID=8YFLogxK
U2 - 10.1007/s00453-011-9587-1
DO - 10.1007/s00453-011-9587-1
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AN - SCOPUS:85028147282
SN - 0178-4617
VL - 63
SP - 634
EP - 644
JO - Algorithmica
JF - Algorithmica
IS - 3
ER -