Multi-unit auctions with budget-constrained bidders

  • Authors:

  • Christian Borgs;Jennifer Chayes;Nicole Immorlica;Mohammad Mahdian;Amin Saberi

  • Affiliations:

  • Microsoft Research, Redmond, WA;MIT CSAIL, Cambridge, MA;MIT CSAIL, Cambridge, MA;Stanford University, Stanford, CA;Stanford University, Stanford, CA

  • Venue:
  • Proceedings of the 6th ACM conference on Electronic commerce
  • Year:
  • 2005

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Abstract

We study a multi-unit auction with multiple bidders, each of whom has a private valuation and a budget. The truthful mechanisms of such an auction are characterized, in the sense that, under standard assumptions, we prove that it is impossible to design a non-trivial truthful auction which allocates all units, while we provide the design of an asymptotically revenue-maximizing truthful mechanism which may allocate only some of the units. Our asymptotic parameter is a budget dominance parameter which measures the size of the budget of a single agent relative to the maximum revenue. We discuss the relevance of these results for the design of Internet ad auctions.