Optimal payments in dominant-strategy mechanisms for single-parameter domains

  • Authors:
  • Victor Naroditskiy;Maria Polukarov;Nicholas R. Jennings

  • Affiliations:
  • University of Southampton, Southampton, United Kingdom;University of Southampton, Southampton, United Kingdom;University of Southampton and King Abdulaziz University, Southampton, United Kingdom

  • Venue:
  • ACM Transactions on Economics and Computation - Inaugural Issue
  • Year:
  • 2013

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Abstract

We study dominant-strategy mechanisms in allocation domains where agents have one-dimensional types and quasilinear utilities. Taking an allocation function as an input, we present an algorithmic technique for finding optimal payments in a class of mechanism design problems, including utilitarian and egalitarian allocation of homogeneous items with nondecreasing marginal costs. Our results link optimality of payment functions to a geometric condition involving triangulations of polytopes. When this condition is satisfied, we constructively show the existence of an optimal payment function that is piecewise linear in agent types.