2015/03/20 by Benjamin Lubin, Lubin, Benjamin
Business, Management and Accounting · Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #Computer Science and Game Theory (cs.GT) #Consumer Market Behavior and Pricing #FOS: Computer and information sciences #Game Theory and Voting Systems
paper · pdf · doi:10.48550/arxiv.1503.06244
openalex publication_date 2015/03/20 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
In settings where full incentive-compatibility is not available, such as core-constraint combinatorial auctions and budget-balanced combinatorial exchanges, we may wish to design mechanisms that are as incentive-compatible as possible. This paper offers a new characterization of approximate incentive-compatibility by casting the pricing problem as a meta-game between the center and the participating agents. Through a suitable set of simplifications, we describe the equilibrium of this game as a variational problem. We use this to characterize the space of optimal prices, enabling closed-form solutions in restricted cases, and numerically-determined prices in the general case. We offer theory motivating this approach, and numerical experiments showing its application.