2014/06/06 by Hu Fu, Fu, Hu, Nima Haghpanah +5 · 2 citations
Decision Sciences · Business, Management and Accounting · Social Sciences · #Auction Theory and Applications #Consumer Market Behavior and Pricing #Experimental Behavioral Economics Studies
paper · pdf · doi:10.48550/arxiv.1406.1571
Crémer and McLean [1985] showed that, when buyers' valuations are drawn from a correlated distribution, an auction with full knowledge on the distribution can extract the full social surplus. We study whether this phenomenon persists when the auctioneer has only incomplete knowledge of the distribution, represented by a finite family of candidate distributions, and has sample access to the real distribution. We show that the naive approach which uses samples to distinguish candidate distributions may fail, whereas an extended version of the Crémer-McLean auction simultaneously extracts full social surplus under each candidate distribution. With an algebraic argument, we give a tight bound on the number of samples needed by this auction, which is the difference between the number of candidate distributions and the dimension of the linear space they span.