Approximately-strategyproof and tractable multiunit auctions [An article from: Decision Support Systems]

This digital document is a journal article from Decision Support Systems, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
We present an approximately-efficient and approximately-strategyproof auction mechanism for a single-good multiunit allocation problem. The bidding language allows marginal-decreasing piecewise-constant curves and quantity-based side constraints. We develop a fully polynomial-time approximation scheme for the multiunit allocation problem, which computes a (1+@e) approximation in worst-case time T=O(n^3/@e), given n bids each with a constant number of pieces. We integrate this approximation scheme within a Vickrey-Clarke-Groves (VCG) mechanism and compute payments for an asymptotic cost of O(T log n). The maximal possible gain from manipulation to a bidder in the combined scheme is bounded by @eV/(1+@e), where V is the total surplus in the efficient outcome.