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Worst-case optimal redistribution of VCG payments in multi-unit auctions

Publication ,  Journal Article
Guo, M; Conitzer, V
Published in: Games and Economic Behavior
September 1, 2009

For allocation problems with one or more items, the well-known Vickrey-Clarke-Groves (VCG) mechanism (aka Clarke mechanism, Generalized Vickrey Auction) is efficient, strategy-proof, individually rational, and does not incur a deficit. However, it is not (strongly) budget balanced: generally, the agents' payments will sum to more than 0. We study mechanisms that redistribute some of the VCG payments back to the agents, while maintaining the desirable properties of the VCG mechanism. Our objective is to come as close to budget balance as possible in the worst case. For auctions with multiple indistinguishable units in which marginal values are nonincreasing, we derive a mechanism that is optimal in this sense. We also derive an optimal mechanism for the case where we drop the non-deficit requirement. Finally, we show that if marginal values are not required to be nonincreasing, then the original VCG mechanism is worst-case optimal. © 2008 Elsevier Inc. All rights reserved.

Duke Scholars

Published In

Games and Economic Behavior

DOI

EISSN

1090-2473

ISSN

0899-8256

Publication Date

September 1, 2009

Volume

67

Issue

1

Start / End Page

69 / 98

Related Subject Headings

  • Economic Theory
  • 3803 Economic theory
  • 3801 Applied economics
  • 1402 Applied Economics
  • 1401 Economic Theory
 

Citation

APA
Chicago
ICMJE
MLA
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Guo, M., & Conitzer, V. (2009). Worst-case optimal redistribution of VCG payments in multi-unit auctions. Games and Economic Behavior, 67(1), 69–98. https://doi.org/10.1016/j.geb.2008.06.007
Guo, M., and V. Conitzer. “Worst-case optimal redistribution of VCG payments in multi-unit auctions.” Games and Economic Behavior 67, no. 1 (September 1, 2009): 69–98. https://doi.org/10.1016/j.geb.2008.06.007.
Guo M, Conitzer V. Worst-case optimal redistribution of VCG payments in multi-unit auctions. Games and Economic Behavior. 2009 Sep 1;67(1):69–98.
Guo, M., and V. Conitzer. “Worst-case optimal redistribution of VCG payments in multi-unit auctions.” Games and Economic Behavior, vol. 67, no. 1, Sept. 2009, pp. 69–98. Scopus, doi:10.1016/j.geb.2008.06.007.
Guo M, Conitzer V. Worst-case optimal redistribution of VCG payments in multi-unit auctions. Games and Economic Behavior. 2009 Sep 1;67(1):69–98.
Journal cover image

Published In

Games and Economic Behavior

DOI

EISSN

1090-2473

ISSN

0899-8256

Publication Date

September 1, 2009

Volume

67

Issue

1

Start / End Page

69 / 98

Related Subject Headings

  • Economic Theory
  • 3803 Economic theory
  • 3801 Applied economics
  • 1402 Applied Economics
  • 1401 Economic Theory