Revenue monotonicity in combinatorial auctions

  • Authors:
  • Baharak Rastegari;Anne Condon;Kevin Leyton-Brown

  • Affiliations:
  • Department of Computer Science, University of British Columbia, Vancouver, B.C., Canada;Department of Computer Science, University of British Columbia, Vancouver, B.C., Canada;Department of Computer Science, University of British Columbia, Vancouver, B.C., Canada

  • Venue:
  • AAAI'07 Proceedings of the 22nd national conference on Artificial intelligence - Volume 1
  • Year:
  • 2007

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Abstract

Intuitively, one might expect that a seller's revenue from an auction weakly increases as the number of bidders grows, as this increases competition. However, it is known that for combinatorial auctions that use the VCG mechanism, a seller can sometimes increase revenue by dropping bidders. In this paper we investigate the extent to which this problem can occur under other dominant-strategy combinatorial auction mechanisms. Our main result is that such failures of "revenue monotonicity" are not limited to mechanisms that achieve efficient allocations. Instead, they can occur under any dominant-strategy direct mechanism that sets prices using critical values, and that always chooses an allocation that cannot be augmented to make some bidder better off, while making none worse off.