A universally-truthful approximation scheme for multi-unit auctions

  • Authors:
  • Berthold Vöcking

  • Affiliations:
  • RWTH Aachen University

  • Venue:
  • Proceedings of the twenty-third annual ACM-SIAM symposium on Discrete Algorithms
  • Year:
  • 2012

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Abstract

We present a randomized, polynomial-time approximation scheme for multi-unit auctions. Our mechanism is truthful in the universal sense, i.e., a distribution over deterministically truthful mechanisms. Previously known approximation schemes were truthful in expectation which is a weaker notion of truthfulness assuming risk neutral bidders. The existence of a universally truthful approximation scheme was questioned by previous work showing that multi-unit auctions with certain technical restrictions on their output do not admit a polynomial-time, universally truthful mechanism with approximation factor better than two. Our new mechanism employs VCG payments in a non-standard way: The deterministic mechanisms underlying our universally truthful approximation scheme are not maximal in range and do not belong to the class of affine maximizers which, on a first view, seems to contradict previous characterizations of VCG-based mechanisms. Instead, each of these deterministic mechanisms is composed of a collection of affine maximizers, one for each bidder. This yields a subjective variant of VCG in which payments for different bidders are defined on the basis of possibly different affine maximizers.