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Research Scientist, Yahoo! Research
UM: 1202 SI North, 1075 Beal Ave
WSU: 313 State Hall (via videoconference)
Despite the importance of matching-double-sided auctions to market design, to date no characterization of truthful matching-double-sided auctions was made. This paper characterizes truthful mechanisms for matching-double-sided auctions by generalizing Roberts' classic result to show that truthful matching-double-sided auctions must "almost" be affine maximizers.
Characterizing truthful matching-double-sided auctions required the creation of a new set of tools, reductions that preserve economic properties. This paper utilizes two such reductions; a truth-preserving reduction and a non-affine preserving reduction. The truth-preserving reduction is used to reduce the matching-double-sided auction to a special case of a combinatorial auction to allow us to make use of the impossibility result proved in Mu’alem and Nisan 2003. Intuitively, our proof shows that truthful matching-double-sided auctions are as hard to design as truthful combinatorial auctions with multi-minded payers.
In addition to the main result the paper develops two important concepts. First, the form of reduction used in this paper is of independent interest as it presents a solution to the question of how to compare mechanism design problems by design difficulty. Second, we define the notion of extension of payments; which is to say that given a set of payments for some players our extension of payments notion finds payments for the remaining players that maintains the truthful and affine maximization properties.
The truthful double-sided auction problem for single parameter players is similar to the truthful combinatorial auction problem for single parameter players where many non affine maximizing solutions exist. McAfee's mechanism provides a non affine maximizing solution for the truthful double-sided auction problem with single parameter players. Our paper focuses on characterizing the case where players are multi minded.
The paper is available at http://www.ricagonen.com/papers/RGonenDSA.pdf.
Rica Gonen is a Research Scientist at Yahoo! Research. Dr. Gonen received her Master’s degree and Ph.D. in Computer Science from The Hebrew University of Jerusalem in 2001 and 2005 respectively. After graduating she spent a year as a post doctoral fellow at Bell-Labs, where she worked on issues in supply chain mechanism design. Following Bell-Labs Rica joined Yahoo Research's Microeconomic and Social Systems group where she developed new mechanisms in sponsored search and ad auctions. Rica’s early research includes designing the first computationally efficient truthful multi-unit combinatorial auctions for non single-minded bidders as well as developing practical solutions to multi-unit combinatorial auctions. Her recent work considers a number of mechanism design topics such as coalition resistance, market characterization, information markets, and sponsored search auctions. Rica holds over a dozen patents in computational mechanism design and was awarded a number of fellowships for her contributions to the field. http://www.ricagonen.com/
