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Limits of Efficiency in Sequential Auctions

  • Michal Feldman
  • Brendan Lucier
  • Vasilis Syrgkanis
Part of the Lecture Notes in Computer Science book series (LNCS, volume 8289)

Abstract

We study the efficiency of sequential first-price item auctions at (subgame perfect) equilibrium. This auction format has recently attracted much attention, with previous work establishing positive results for unit-demand valuations and negative results for submodular valuations. This leaves a large gap in our understanding between these valuation classes. In this work we resolve this gap on the negative side. In particular, we show that even in the very restricted case in which each bidder has either an additive valuation or a unit-demand valuation, there exist instances in which the inefficiency at equilibrium grows linearly with the minimum of the number of items and the number of bidders. Moreover, these inefficient equilibria persist even under iterated elimination of weakly dominated strategies. Our main result implies linear inefficiency for many natural settings, including auctions with gross substitute valuations, capacitated valuations, budget-additive valuations, and additive valuations with hard budget constraints on the payments. For capacitated valuations, our results imply a lower bound that equals the maximum capacity of any bidder, which is tight following the upper-bound technique established by Paes Leme et al. [20].

Keywords

Subgame Perfect Equilibrium Combinatorial Auction Price Setter Walrasian Equilibrium Optimal Welfare 
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

  • Michal Feldman
    • 1
  • Brendan Lucier
    • 2
  • Vasilis Syrgkanis
    • 3
  1. 1.Hebrew UnivsersityIsrael
  2. 2.Microsoft ResearchUSA
  3. 3.Dept of Computer ScienceCornell UniversityUSA

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