Simple versus optimal mechanisms
Proceedings of the 10th ACM conference on Electronic commerce
Efficiency of (revenue-)optimal mechanisms
Proceedings of the 10th ACM conference on Electronic commerce
Revenue maximization with a single sample
Proceedings of the 11th ACM conference on Electronic commerce
Simple, optimal and efficient auctions
WINE'11 Proceedings of the 7th international conference on Internet and Network Economics
Selling in Exclusive Markets: Some Observations on Prior-Free Mechanism Design
ACM Transactions on Economics and Computation - Special Issue on Algorithmic Game Theory
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What fraction of the potential social surplus in an environment can be extracted by a revenue-maximizing monopolist? We investigate this problem in Bayesian single-parameter environments with independent private values. The precise answer to the question obviously depends on the particulars of the environment: the feasibility constraint and the distributions from which the bidders' private values are sampled. Rather than solving the problem in particular special cases, our work aims to provide universal lower bounds on the revenue-to-welfare ratio that hold under the most general hypotheses that allow for non-trivial such bounds. Our results can be summarized as follows. For general feasibility constraints, the revenue-to-welfare ratio is at least a constant times the inverse-square-root of the number of agents, and this is tight up to constant factors. For downward-closed feasibility constraints, the revenue-to-welfare ratio is bounded below by a constant. Both results require the bidders' distributions to satisfy hypotheses somewhat stronger than regularity; we show that the latter result cannot avoid this requirement.