2013/05/02 by Robert Kleinberg, Yang Yuan, Yuan Yang +2 · 1 citation
Computer Science · Decision Sciences · Economics, Econometrics and Finance · Social Sciences · #Auction Theory and Applications #Computer Science and Game Theory (cs.GT) #Economic theories and models #Experimental Behavioral Economics Studies #FOS: Computer and information sciences #J.4 #cs.GT
paper · pdf · doi:10.48550/arxiv.1305.0534
15 pages
arxiv created 2013/05/02 · openalex publication_date 2013/05/02 · arxiv updated 2013/05/03 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
What fraction of the potential social surplus in an environment can be extracted by a revenue-maximizing monopolist? We investigate this problem in Bayesian single-parameter environments with independent private values. The precise answer to the question obviously depends on the particulars of the environment: the feasibility constraint and the distributions from which the bidders' private values are sampled. Rather than solving the problem in particular special cases, our work aims to provide universal lower bounds on the revenue-to-welfare ratio that hold under the most general hypotheses that allow for non-trivial such bounds. Our results can be summarized as follows. For general feasibility constraints, the revenue-to-welfare ratio is at least a constant times the inverse-square-root of the number of agents, and this is tight up to constant factors. For downward-closed feasibility constraints, the revenue-to-welfare ratio is bounded below by a constant. Both results require the bidders' distributions to satisfy hypotheses somewhat stronger than regularity; we show that the latter result cannot avoid this requirement.