Approximation schemes for sequential posted pricing in multi-unit auctions

  • Authors:
  • Tanmoy Chakraborty;Eyal Even-Dar;Sudipto Guha;Yishay Mansour;S. Muthukrishnan

  • Affiliations:
  • University of Pennsylvania, Philadelphia, PA;-;University of Pennsylvania, Philadelphia, PA;Google Israel and The Blavatnik School of Computer Science, Tel-Aviv University, Tel-Aviv, Israel;Google Research, New York, NY

  • Venue:
  • WINE'10 Proceedings of the 6th international conference on Internet and network economics
  • Year:
  • 2010

Quantified Score

Hi-index 0.00

Visualization

Abstract

We design algorithms for computing approximately revenuemaximizing sequential posted-pricing mechanisms (SPM) in K-unit auctions, in a standard Bayesian model. A seller has K copies of an item to sell, and there are n buyers, each interested in only one copy, and has some value for the item. The seller posts a price for each buyer, using Bayesian information about buyers' valuations, who arrive in a sequence. An SPM specifies the ordering of buyers and the posted prices, and may be adaptive or non-adaptive in its behavior. The goal is to design SPM in polynomial time to maximize expected revenue. We compare against the expected revenue of optimal SPM, and provide a polynomial time approximation scheme (PTAS) for both nonadaptive and adaptive SPMs. This is achieved by two algorithms: an efficient algorithm that gives a (1 - 1/√2πK)-approximation (and hence a PTAS for sufficiently large K), and another that is a PTAS for constant K. The first algorithm yields a non-adaptive SPM that yields its approximation guarantees against an optimal adaptive SPM - this implies that the adaptivity gap in SPMs vanishes as K becomes larger.