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The complexity of optimal multidimensional pricing for a unit-demand buyer

Xi Chen, Ilias Diakonikolas, Dimitris Paparas, Xiaorui Sun and Mihalis Yannakakis

Games and Economic Behavior, 2018, vol. 110, issue C, 139-164

Abstract: We resolve the complexity of revenue-optimal deterministic auctions in the unit-demand single-buyer Bayesian setting, i.e., the optimal item pricing problem, when the buyer's values for the items are independent. We show that the problem of computing a revenue-optimal pricing can be solved in polynomial time for distributions of support size 2, and its decision version is NP-complete for distributions of support size 3. We also show that the problem remains NP-complete for the case of identical distributions.

Keywords: Deterministic mechanism design; NP-completeness; Complexity theory; Algorithms (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:gamebe:v:110:y:2018:i:c:p:139-164