Mechanism Design via Consensus Estimates, Cross Checking, and Profit Extraction

  • Authors:
  • Bach Q. Ha;Jason D. Hartline

  • Affiliations:
  • Northwestern University;Northwestern University

  • Venue:
  • ACM Transactions on Economics and Computation - Special Issue on Algorithmic Game Theory
  • Year:
  • 2013

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Abstract

There is only one technique for prior-free optimal mechanism design that generalizes beyond the structurally benevolent setting of digital goods. This technique uses random sampling to estimate the distribution of agent values and then employs the Bayesian optimal mechanism for this estimated distribution on the remaining players. Though quite general, even for digital goods, this random sampling auction has a complicated analysis and is known to be suboptimal. To overcome these issues we generalize the consensus and profit extraction techniques from Goldberg and Hartline [2003] to structurally rich environments that include, for example, single-minded combinatorial auctions.