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Tight revenue gaps among simple and optimal mechanisms

Published: 28 January 2020 Publication History

Abstract

Consider a fundamental problem in microeconomics: selling a single item to a number of potential buyers, who independently draw their values from regular and publicly known distributions. There are four mechanisms widely studied in the literature and widely used in practice: Myerson Auction (OPT), Sequential Posted Pricing (SPM), Second-Price Auction with Anonymous Reserve (AR), and Anonymous Pricing (AP).
OPT is revenue-optimal but complicated, which also experiences several practical issues such as fairness. AP is the simplest mechanism, but also generates the lowest revenue among these four mechanisms. SPM and AR are of intermediate complexity and revenue. A quantitative approach to comparing the relative power of these mechanisms is to study their revenue gaps, each of which is defined as the largest ratio between the revenues from a pair of mechanisms. This letter surveys some recent developments on establishing tight revenue gaps, and highlights some open questions.

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  • (2022)Tight Revenue Gaps among Multiunit MechanismsSIAM Journal on Computing10.1137/21M145636451:5(1535-1579)Online publication date: 28-Oct-2022

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cover image ACM SIGecom Exchanges
ACM SIGecom Exchanges  Volume 17, Issue 2
October 2019
77 pages
EISSN:1551-9031
DOI:10.1145/3381329
Issue’s Table of Contents
Permission to make digital or hard copies of part or all of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for third-party components of this work must be honored. For all other uses, contact the Owner/Author.

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Association for Computing Machinery

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Publication History

Published: 28 January 2020
Published in SIGECOM Volume 17, Issue 2

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Author Tags

  1. approximation ratio
  2. revenue maximization

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  • (2022)Tight Revenue Gaps among Multiunit MechanismsSIAM Journal on Computing10.1137/21M145636451:5(1535-1579)Online publication date: 28-Oct-2022

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