A Study of Limited-Precision, Incremental Elicitation in Auctions

We investigate the design of iterative, limited-precision mechanisms for single-good auctions with dominant strategy equilibria. Our aim is to design mechanisms that minimize the number of bits required to determine approximately optimal allocations by sequentially asking bidders to reveal their valuations with increasing precision, and limiting participation to those bidders who might win. We prove several necessary conditions that severely restrict the space of mechanisms satisfying our criteria. We also study empirically the optimization of the parameters of our sequential mechanisms, and how number of bidders and cost of communication impact expected amount of communication, expected loss in welfare, and other measures. Finally, we show that incremental limited-precision mechanisms offer advantages over fixed, single-shot mechanisms. Categories and Subject Descriptors J.4 [Computer Applications]: Social and Behavioral Sciences— economics; I.2.11 [Artificial Intelligence]: Dist...

• Type: Conference
• Year: 2004
• Where: ATAL
• Authors: Alexander Kress, Craig Boutilier
• Keywords: ATAL 2004, Dominant Strategy Equilibria, Limited-precision Mechanisms, Mechanisms Offer Advantages