Multi-unit auctions with budget-constrained bidders

We study a multi-unit auction with multiple bidders, each of whom has a private valuation and a budget. The truthful mechanisms of such an auction are characterized, in the sense that, under standard assumptions, we prove that it is impossible to design a non-trivial truthful auction which allocates all units, while we provide the design of an asymptotically revenue-maximizing truthful mechanism which may allocate only some of the units. Our asymptotic parameter is a budget dominance parameter which measures the size of the budget of a single agent relative to the maximum revenue. We discuss the relevance of these results for the design of Internet ad auctions. Categories and Subject Descriptors J.4 [Computer Applications]: Social and Behavioral Sciences—Economics; F.2 [Theory of Computation]: Analysis of Algorithms and Problem Complexity

• Type: Conference
• Year: 2005
• Where: SIGECOM
• Authors: Christian Borgs, Jennifer T. Chayes, Nicole Immorlica, Mohammad Mahdian, Amin Saberi
• Keywords: Non-trivial Truthful Auction, Revenue-maximizing Truthful Mechanism, SIGECOM 2005, Truthful Mechanism