Truthful Auctions with Optimal Profit

  • Pinyan Lu
  • Shang-Hua Teng
  • Changyuan Yu
Conference paper

DOI: 10.1007/11944874_4

Part of the Lecture Notes in Computer Science book series (LNCS, volume 4286)
Cite this paper as:
Lu P., Teng SH., Yu C. (2006) Truthful Auctions with Optimal Profit. In: Spirakis P., Mavronicolas M., Kontogiannis S. (eds) Internet and Network Economics. WINE 2006. Lecture Notes in Computer Science, vol 4286. Springer, Berlin, Heidelberg

Abstract

We study the design of truthful auction mechanisms for maximizing the seller’s profit. We focus on the case when the auction mechanism does not have any knowledge of bidders’ valuations, especially of their upper bound. For the Single-Item auction, we obtain an “asymptotically” optimal scheme: for any kZ +  and ε>0, we give a randomized truthful auction that guarantees an expected profit of \(\Omega(\frac{OPT}{\ln OPT \ln\ln OPT \cdots (\ln^{(k)}OPT)^{1+\epsilon}})\), where OPT is the maximum social utility of the auction. Moreover, we show that no truthful auction can guarantee an expected profit of \(\Omega(\frac{OPT}{\ln OPT \ln\ln OPT\cdots \ln^{(k)}OPT})\).

In addition, we extend our results and techniques to Multi-units auction, Unit-Demand auction, and Combinatorial auction.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2006

Authors and Affiliations

  • Pinyan Lu
    • 1
  • Shang-Hua Teng
    • 2
  • Changyuan Yu
    • 1
  1. 1.Department of Computer Science and TechnologyTsinghua University and Microsoft Research AsiaBeijingChina
  2. 2.Department of Computer ScienceBoston University 

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