Supply-limiting mechanisms

Tim Roughgarden*, Inbal Talgam-Cohen, Qiqi Yan

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Most results in revenue-maximizing auction design hinge on "getting the price right" - offering goods to bidders at a price low enough to encourage a sale, but high enough to garner non-trivial revenue. Getting the price right can be hard work, especially when the seller has little or no a priori information about bidders' valuations. A simple alternative approach is to "let the market do the work", and have prices emerge from competition for scarce goods. The simplest-imaginable implementation of this idea is the following: first, if necessary, impose an artificial limit on the number of goods that can be sold; second, run the welfare-maximizing VCG mechanism subject to this limit. We prove that such "supply-limiting mechanisms" achieve near-optimal expected revenue in a range of single- and multi-parameter Bayesian settings. Indeed, despite their simplicity, we prove that they essentially match the state-of-the-art in prior-independent mechanism design.

Original languageEnglish
Title of host publicationEC '12 - Proceedings of the 13th ACM Conference on Electronic Commerce
Pages844-861
Number of pages18
DOIs
StatePublished - 2012
Externally publishedYes
Event13th ACM Conference on Electronic Commerce, EC '12 - Valencia, Spain
Duration: 4 Jun 20128 Jun 2012

Publication series

NameProceedings of the ACM Conference on Electronic Commerce

Conference

Conference13th ACM Conference on Electronic Commerce, EC '12
Country/TerritorySpain
CityValencia
Period4/06/128/06/12

Keywords

  • mechanism design
  • prior-independence
  • revenue optimization

Fingerprint

Dive into the research topics of 'Supply-limiting mechanisms'. Together they form a unique fingerprint.

Cite this