Diffusion Multi-unit Auctions with Diminishing Marginal Utility Buyers
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We consider an auction mechanism design problem where a seller sells multiple homogeneous items to a set of buyers who are connected to form a network. Each buyer only knows the buyers he directly connects with and has a diminishing marginal utility valuation for the items. The seller initially also only connects to some of the buyers. The goal is to design an auction to incentivize the buyers who are aware of the auction to further invite their neighbors to join the auction. This is challenging because the buyers are competing for the items and they would not invite each other by default. Solutions have been proposed recently for the settings where each buyer requires at most one unit and demonstrated the difficulties for the design even in the simple settings. We move this forward to propose the very first diffusion auction for the multi-unit demand settings. We also show that it improves both the social welfare and the revenue to incentivize the seller to apply it.
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