2014/03/25 by Alessandro Chiesa, Silvio Micali, Chiesa, Alessandro +3
Computer Science · Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #Computer Science and Game Theory (cs.GT) #Economic theories and models #FOS: Computer and information sciences #Housing Market and Economics #cs.GT
paper · pdf · doi:10.48550/arxiv.1403.6410
arxiv created 2014/03/25 · openalex publication_date 2014/03/25 · arxiv updated 2014/03/26 · openalex created_date 2016/06/24 · openalex updated_date 2026/07/28
We consider auctions in which the players have very limited knowledge about their own valuations. Specifically, the only information that a Knightian player i has about the profile of true valuations, θ^*, consists of a set of distributions, from one of which θi^* has been drawn. The VCG mechanism guarantees very high social welfare both in single- and multi-good auctions, so long as Knightian players do not select strategies that are dominated. With such Knightian players, however, we prove that the VCG mechanism guarantees very poor social welfare in unrestricted combinatorial auctions.