ESA 2013: Algorithms – ESA 2013 pp 277-288 | Cite as

Limitations of Deterministic Auction Design for Correlated Bidders

  • Ioannis Caragiannis
  • Christos Kaklamanis
  • Maria Kyropoulou
Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 8125)

Abstract

The seminal work of Myerson (Mathematics of OR 81) characterizes incentive-compatible single-item auctions among bidders with independent valuations. In this setting, relatively simple deterministic auction mechanisms achieve revenue optimality. When bidders have correlated valuations, designing the revenue-optimal deterministic auction is a computationally demanding problem; indeed, Papadimitriou and Pierrakos (STOC 11) proved that it is APX-hard, obtaining an explicit inapproximability factor of 99.95%. In the current paper, we strengthen this inapproximability factor to 57/58 ≈ 98.3%. Our proof is based on a gap-preserving reduction from the problem of maximizing the number of satisfied linear equations in an over-determined system of linear equations modulo 2 and uses the classical inapproximability result of Håstad (J. ACM 01). We furthermore show that the gap between the revenue of deterministic and randomized auctions can be as low as 13/14 ≈ 92.9%, improving an explicit gap of 947/948 ≈ 99.9% by Dobzinski, Fu, and Kleinberg (STOC 11).

Keywords

Variable Point Connection Point Auction Mechanism Optimal Auction Variable Gadget 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  • Ioannis Caragiannis
    • 1
  • Christos Kaklamanis
    • 1
  • Maria Kyropoulou
    • 1
  1. 1.Computer Technology Institute and Press “Diophantus” &, Department of Computer Engineering and InformaticsUniversity of PatrasRioGreece

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