Truthful Outcomes from Non-Truthful Position Auctions

Dütting, Paul, Felix Fischer and David C. Parkes

Scholarly Articles from Harvard University Department of Economics

Abstract: We exhibit a property of the VCG mechanism that can help explain the surprising rarity with which it is used even in settings with unit demand: a relative lack of robustness to inaccuracies in the choice of its parameters. For a standard position auction environment in which the auctioneer may not know the precise relative values of the positions, we show that under both complete and incomplete information a non-truthful mechanism supports the truthful outcome of the VCG mechanism for a wider range of these values than the VCG mechanism itself. The result for complete information concerns the generalized second-price mechanism and lends additional theoretical support to the use of this mechanism in practice. Particularly interesting from a technical perspective is the case of incomplete information, where a surprising combinatorial equivalence helps us to avoid confrontation with an unwieldy differential equation.

Date: 2016
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Citations: View citations in EconPapers (3)

Published in Proceedings of the 2016 ACM Conference on Economics and Computation - EC '16

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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:32227268

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