We study the menu complexity of optimal and approximately-optimal auctions in the context of the ``FedEx'' problem, a so-called ``one-and-a-half-dimensional'' setting where a single bidder has both a value and a deadline for receiving an item [FGKK 16]. The menu complexity of an auction is equal to the number of distinct (allocation, price) pairs that a bidder might receive [HN 13]. We show the following when the bidder has $$n$$ possible deadlines: 1) Exponential menu complexity is necessary to be exactly optimal: There exist instances where the optimal mechanism has menu complexity $$\geq 2^n-1$$. This matches exactly the upper bound provided by Fiat et al.'s algorithm, and resolves one of their open questions [FGKK 16]. 2) Fully polynomial menu complexity is necessary and sufficient for approximation: For all instances, there exists a mechanism guaranteeing a multiplicative $$(1-\epsilon)$$-approximation to the optimal revenue with menu complexity $$O(n^{3/2}\sqrt{\frac{\min\{n/\epsilon,\ln(v_{\max})\}}{\epsilon}}) = O(n^2/\epsilon)$$, where $$v_{\max}$$ denotes the largest value in the support of integral distributions. \item There exist instances where any mechanism guaranteeing a multiplicative $(1-O(1/n^2))$-approximation to the optimal revenue requires menu complexity $$\Omega(n^2)$$. Our main technique is the polygon approximation of concave functions [Rote 91], and our results here should be of independent interest. We further show how our techniques can be used to resolve an open question of [DW 17] on the menu complexity of optimal auctions for a budget-constrained buyer.
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An Efficient epsilon-BIC to BIC Transformation and Its Application to Black-Box Reduction in Revenue Maximization
We consider the black-box reduction from multi-dimensional revenue maximization to virtual welfare maximization. Cai et al. [12, 13, 14, 15] show a polynomial-time approximation-preserving re-duction, however, the mechanism produced by their reduction is only approximately Bayesian incentive compatible (ε-BIC). We provide two new polynomial time transformations that convert anyε-BICmechanism to an exactly BIC mechanism with only a negligible revenue loss. (i) Our first transformation applies to any mechanism design setting with downward-closed outcome space and only requires sample accessto the agents’ type distributions. (ii) Our second transformation applies to the fully general outcome space, removing the downward-closed assumption, but requires full access to the agents’ type distributions. Both transformations only require query access to the originalε-BIC mechanism. Otherε-BIC to BICtransformations for revenue exist in the literature but all require exponential time to run in either of the settings we consider. As an application of our transformations, we improve the reduction by Cai et al. to generate an exactly BIC mechanism.
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- Award ID(s):
- 1942583
- PAR ID:
- 10196401
- Date Published:
- Journal Name:
- ACM-SIAM Symposium on Discrete Algorithms (SODA21)
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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