Envy-free auctions for digital goods

  • Authors:
  • Andrew V. Goldberg;Jason D. Hartline

  • Affiliations:
  • Microsoft Research, Mountain View, CA;University of Washington, Seattle, WA

  • Venue:
  • Proceedings of the 4th ACM conference on Electronic commerce
  • Year:
  • 2003

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Abstract

We study auctions for a commodity in unlimited supply, e.g., a digital good. In particular we consider three desirable properties for auctions: item Competitive: the auction achieves a constant fraction of the optimal revenue even on worst case inputs. item Truthful: any bidder's best strategy is to bid the maximum value they are willing to pay. item Envy-free: after the auction is run, no bidder would be happier with the outcome of another bidder (for digital good auctions, this means that there is a single sale price and goods are allocated to all bidders willing to pay this price).Our main result is to show that no constant-competitive auction that is truthful and always gives outcomes are envy-free. We consider two relaxations of these requirements, allowing the auction to be untruthful with vanishingly small probability, and allowing the auction to give non-envy-free outcomes with vanishingly small probability. Under both of these relaxations we get competitive auctions.