Almost budget balanced mechanisms with scalar bids for allocation of a divisible good
Srikrishna Bhashyam and
European Journal of Operational Research, 2017, vol. 262, issue 3, 1196-1207
This paper is about allocation of an infinitely divisible good to several rational and strategic agents. The allocation is done by a social planner who has limited information because the agents’ valuation functions are taken to be private information known only to the respective agents. We allow only a scalar signal, called a bid, from each agent to the social planner. Yang and Hajek [Yang, S., Hajek, B., 2007. “VCG-Kelly mechanisms for allocation of divisible goods: Adapting VCG mechanisms to one-dimensional signals”, IEEE Journal on Selected Areas in Communications 25 (6), 1237–1243.] and Johari and Tsitsiklis [Johari, R., Tsitsiklis, J. N., 2009. “Efficiency of scalar-parameterized mechanisms”, Operations Research 57 (4), 823–839.] proposed a scalar strategy Vickrey–Clarke–Groves (SSVCG) mechanism with efficient Nash equilibria. We consider a setting where the social planner desires minimal budget surplus. Example situations include fair sharing of Internet resources and auctioning of certain public goods where revenue maximization is not a consideration. Under the SSVCG framework, we propose a mechanism that is efficient and comes close to budget balance by returning much of the payments back to the agents in the form of rebates. We identify a design criterion for almost budget balance, impose feasibility and voluntary participation constraints, simplify the constraints, and arrive at a convex optimization problem to identify the parameters of the rebate functions. The convex optimization problem has a linear objective function and a continuum of linear constraints. We propose a solution method that involves a finite number of constraints, and identify the number of samples sufficient for a good approximation.
Keywords: Auctions/bidding; Game theory; Economics; Linear programming; Uncertain convex program (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:262:y:2017:i:3:p:1196-1207
Access Statistics for this article
European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati
More articles in European Journal of Operational Research from Elsevier
Series data maintained by Dana Niculescu ().