Revenue submodularity

  • Authors:
  • Shaddin Dughmi;Tim Roughgarden;Mukund Sundararajan

  • Affiliations:
  • Stanford University, Stanford, CA, USA;Stanford University, Stanford, CA, USA;Stanford University, Stanford, CA, USA

  • Venue:
  • Proceedings of the 10th ACM conference on Electronic commerce
  • Year:
  • 2009

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Abstract

We introduce revenue submodularity, the property that market expansion has diminishing returns on an auction's expected revenue. We prove that revenue submodularity is generally possible only in matroid markets, that Bayesian-optimal auctions are always revenue-submodular in such markets, and that the VCG mechanism is revenue-submodular in matroid markets with i.i.d bidders and "sufficient competition". We also give two applications of revenue submodularity: good approximation algorithms for novel market expansion problems, and approximate revenue guarantees for the VCG mechanism with i.i.d bidders.