Complexity of mechanism design
UAI'02 Proceedings of the Eighteenth conference on Uncertainty in artificial intelligence
Efficiency of (revenue-)optimal mechanisms
Proceedings of the 10th ACM conference on Electronic commerce
On behalf of the seller and society: bicriteria mechanisms for unit-demand auctions
LATIN'06 Proceedings of the 7th Latin American conference on Theoretical Informatics
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We study selling one indivisible object to multiple potential buyers. Depending on the objective of the seller, different selling mechanisms are desirable. The Vickrey auction with a truthful reserve price is optimal when the objective is efficiency (i.e., allocating the object to the party who values it the most). The Myerson auction is optimal when the objective is the seller's expected utility. These two objectives are generally in conflict, and cannot be maximized with one mechanism. In many real-world settings---such as privatization and competing electronic marketplaces---it is not clear that the objective should be either efficiency or seller's expected utility. Typically, one of these objectives should weigh more than the other, but both are important. We account for importance of both objectives by designing a new deterministic auction mechanism that maximizes expected social welfare subject to a minimum constraint on the seller's expected utility. This way the seller can expect to do well enough for himself, while maintaining the attractive properties of the mechanism.