Non-quasi-linear Agents in Quasi-linear Mechanisms

12/04/2020
by   Moshe Babaioff, et al.
0

Mechanisms with money are commonly designed under the assumption that agents are quasi-linear, meaning they have linear disutility for spending money. We study the implications when agents with non-linear (specifically, convex) disutility for payments participate in mechanisms designed for quasi-linear agents. We first show that any mechanism that is truthful for quasi-linear buyers has a simple best response function for buyers with non-linear disutility from payments, in which each bidder simply scales down her value for each potential outcome by a fixed factor, equal to her target return on investment (ROI). We call such a strategy ROI-optimal. We prove the existence of a Nash equilibrium in which agents use ROI-optimal strategies for a general class of allocation problems. Motivated by online marketplaces, we then focus on simultaneous second-price auctions for additive bidders and show that all ROI-optimal equilibria in this setting achieve constant-factor approximations to suitable welfare and revenue benchmarks.

READ FULL TEXT

page 1

page 2

page 3

page 4

research
04/06/2019

Optimal Nash Equilibria for Bandwidth Allocation

In bandwidth allocation, competing agents wish to transmit data along pa...
research
07/28/2021

Generalized Nash Equilibrium Problems with Mixed-Integer Variables

We consider generalized Nash equilibrium problems (GNEPs) with non-conve...
research
07/10/2023

Auction Design for Value Maximizers with Budget and Return-on-spend Constraints

The paper designs revenue-maximizing auction mechanisms for agents who a...
research
08/21/2023

Mechanisms that play a game, not toss a coin

Randomized mechanisms can have good normative properties compared to the...
research
04/06/2018

Social Choice with Non Quasi-linear Utilities

Without monetary payments, the Gibbard-Satterthwaite theorem proves that...
research
03/13/2023

Strategy-proof Budgeting via a VCG-like Mechanism

We present a strategy-proof public goods budgeting mechanism where agent...
research
02/26/2020

Gini Index based Initial Coin Offering Mechanism

As a fundraising method, Initial Coin Offering (ICO) has raised billions...

Please sign up or login with your details

Forgot password? Click here to reset