Welfare Undominated Groves Mechanisms

A common objective in mechanism design is to choose the outcome (for example, allocation of resources) that maximizes the sum of the agents' valuations, without introducing incentives for agents to misreport their preferences. The class of Groves mechanisms achieves this; however, these mechanisms require the agents to make payments, thereby reducing the agents' total welfare. In this paper we introduce a measure for comparing two mechanisms with respect to the final welfare they generate. This measure induces a partial order on mechanisms and we study the question of finding minimal elements with respect to this partial order. In particular, we say a non-deficit Groves mechanism is welfare undominated if there exists no other non-deficit Groves mechanism that always has a smaller or equal sum of payments. We focus on two domains: (i) auctions with multiple identical units and unit-demand bidders, and (ii) mechanisms for public project problems. In the first domain we analyti...

• Type: Journal
• Year: 2008
• Where: CORR
• Authors: Krzysztof R. Apt, Vincent Conitzer, Mingyu Guo, Evangelos Markakis
• Keywords: CORR 2008, Education, Groves Mechanism, Non-deficit Groves Mechanism, Welfare