Faster dynamic auctions via polymatroid sum

Katharina Eickhoff, Meike Neuwohner, Britta Peis, Niklas Rieken, Laura Vargas Koch and Lázló A. Végh

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We consider dynamic auctions for finding Walrasian equilibria in markets with indivisible items and strong gross substitutes valuation functions. Each price adjustment step in these auction algorithms requires finding an inclusion-wise minimal maximally overdemanded set or an inclusion-wise minimal maximally underdemanded set at the current prices. Both can be formulated as a submodular function minimization problem. We observe that minimizing this submodular function corresponds to a polymatroid sum problem, and using this viewpoint, we give a fast and simple push-relabel algorithm for finding the required sets. This improves on the previously best running time of Murota, Shioura and Yang (ISAAC 2013). Our algorithm is an adaptation of the push-relabel framework by Frank and Miklós (JJIAM 2012) to the particular setting. We obtain a further improvement for the special case of unit-supplies. We further show the following monotonicity properties of Walrasian prices: both the minimal and maximal Walrasian prices can only increase if supply of goods decreases, or if the demand of buyers increases. This is derived from a fine-grained analysis of market prices. We call packing prices a price vector such that there is a feasible allocation where each buyer obtains a utility maximizing set. Conversely, by covering prices we mean a price vector such that there exists a collection of utility maximizing sets of the buyers that include all available goods. We show that for strong gross substitutes valuations, the component-wise minimal packing prices coincide with the minimal Walrasian prices and the component-wise maximal covering prices coincide with the maximal Walrasian prices. These properties in turn lead to the price monotonicity results.

Keywords: dynamic auctions; walrasian prices; strong gross substitutes; polymatroid sum; push-relabel; monotonicity (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2025-04-12
New Economics Papers: this item is included in nep-des
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Published in ACM Transactions on Economics and Computation, 12, April, 2025, 13(3). ISSN: 2167-8375

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