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Clearing Markets via Bundles

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Algorithmic Game Theory (SAGT 2014)

Part of the book series: Lecture Notes in Computer Science ((LNISA,volume 8768))

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Abstract

We study algorithms for combinatorial market design problems, where a set of heterogeneous and indivisible objects are priced and sold to potential buyers subject to equilibrium constraints. Extending the CWE notion introduced by Feldman et al. [STOC 2013], we introduce the concept of a Market-Clearing Combinatorial Walrasian Equilibium (MC-CWE) as a natural relaxation of the classical Walrasian equilibrium (WE) solution concept. The only difference between a MC-CWE and a WE is the ability for the seller to bundle the items prior to sale. This innocuous and natural bundling operation imposes a plethora of algorithmic and economic challenges and opportunities. Unlike WE, which is guaranteed to exist only for (gross) substitutes valuations, a MC-CWE always exists. The main algorithmic challenge, therefore, is to design computationally efficient mechanisms that generate MC-CWE outcomes that approximately maximize social welfare. For a variety of valuation classes encompassing substitutes and complements (including super-additive, single-minded and budget-additive valuations), we design polynomial-time MC-CWE mechanisms that provide tight welfare approximation results.

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Author information

Authors and Affiliations

  1. Tel Aviv University and Microsoft Research, Tel Aviv, Israel

    Michal Feldman

  2. Microsoft Research, Cambridge, MA, USA

    Brendan Lucier

Authors
  1. Michal Feldman
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  2. Brendan Lucier
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Editor information

Editors and Affiliations

  1. Faculty of Industrial Engineering and Management, Technion Israel Institute of Technology, Israel

    Ron Lavi

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Feldman, M., Lucier, B. (2014). Clearing Markets via Bundles. In: Lavi, R. (eds) Algorithmic Game Theory. SAGT 2014. Lecture Notes in Computer Science, vol 8768. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-44803-8_14

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  • DOI: https://doi.org/10.1007/978-3-662-44803-8_14

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-662-44802-1

  • Online ISBN: 978-3-662-44803-8

  • eBook Packages: Computer ScienceComputer Science (R0)

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