Monotonic Mechanisms for Selling Multiple Goods

Ran Ben-Moshe, Sergiu Hart and Noam Nisan

Papers from arXiv.org

Abstract: Maximizing the revenue from selling two or more goods has been shown to require the use of $nonmonotonic$ mechanisms, where a higher-valuation buyer may pay less than a lower-valuation one. Here we show that the restriction to $monotonic$ mechanisms may not just lower the revenue, but may in fact yield only a $negligible$ $fraction$ of the maximal revenue; more precisely, the revenue from monotonic mechanisms is no more than k times the simple revenue obtainable by selling the goods separately, or bundled (where k is the number of goods), whereas the maximal revenue may be arbitrarily larger. We then study the class of monotonic mechanisms and its subclass of allocation-monotonic mechanisms, and obtain useful characterizations and revenue bounds.

Date: 2022-10, Revised 2024-06
New Economics Papers: this item is included in nep-des and nep-mic
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