Envy-Free Allocations for Budgeted Bidders

  • Authors:
  • David Kempe;Ahuva Mu'Alem;Mahyar Salek

  • Affiliations:
  • Department of Computer Science, University of Southern California, USA 90089-0781;Social and Information Sciences Laboratory, California Institute of Technology, Pasadena, USA 91106;Department of Computer Science, University of Southern California, USA 90089-0781

  • Venue:
  • WINE '09 Proceedings of the 5th International Workshop on Internet and Network Economics
  • Year:
  • 2009

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Abstract

We study the problem of identifying prices to support a given allocation of items to bidders in an envy-free way. A bidder will envy another bidder if she would prefer to obtain the other bidder's item at the price paid by that bidder. Envy-free prices for allocations have been studied extensively; here, we focus on the impact of budgets: beyond their willingness to pay for items, bidders are also constrained by their ability to pay, which may be lower than their willingness.In a recent paper, Aggarwal et al. show that a variant of the Ascending Auction finds a feasible and bidder-optimal assignment and supporting envy-free prices in polynomial time so long as the input satisfies certain non-degeneracy conditions. While this settles the problem of finding a feasible allocation, an auctioneer might sometimes also be interested in a specific allocation of items to bidders. We present two polynomial-time algorithms for this problem, one which finds maximal prices supporting the given allocation (if such prices exist), and another which finds minimal prices. We also prove a structural result characterizing when different allocations are supported by the same minimal price vector.