Simple Mechanisms For Agents With Complements
Abstract
We study the efficiency of simple auctions in the presence of complements. [DMSW15] introduced the singlebid auction, and showed that it has a price of anarchy (PoA) of $O(\log m)$ for complementfree (i.e., subadditive) valuations. Prior to our work, no nontrivial upper bound on the PoA of single bid auctions was known for valuations exhibiting complements. We introduce a hierarchy over valuations, where levels of the hierarchy correspond to the degree of complementarity, and the PoA of the single bid auction degrades gracefully with the level of the hierarchy. This hierarchy is a refinement of the Maximum over Positive Hypergraphs (MPH) hierarchy [FFIILS15], where the degree of complementarity $d$ is captured by the maximum number of neighbors of a node in the positive hypergraph representation. We show that the price of anarchy of the single bid auction for valuations of level $d$ of the hierarchy is $O(d^2 \log(m/d))$, where $m$ is the number of items. We also establish an improved upper bound of $O(d \log m)$ for a subclass where every hyperedge in the positive hypergraph representation is of size at most 2 (but the degree is still $d$). Finally, we show that randomizing between the single bid auction and the grand bundle auction has a price of anarchy of at most $O(\sqrt{m})$ for general valuations. All of our results are derived via the smoothness framework, thus extend to coarsecorrelated equilibria and to Bayes Nash equilibria.
 Publication:

arXiv eprints
 Pub Date:
 March 2016
 arXiv:
 arXiv:1603.07939
 Bibcode:
 2016arXiv160307939F
 Keywords:

 Computer Science  Computer Science and Game Theory
 EPrint:
 Proceedings of the 2016 ACM Conference on Economics and Computation