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CORR
2010
Springer

Budget Feasible Mechanisms

9 years 5 months ago
Budget Feasible Mechanisms
We study a novel class of mechanism design problems in which the outcomes are constrained by the payments. This basic class of mechanism design problems captures many common economic situations, and yet it has not been studied, to our knowledge, in the past. We focus on the case of procurement auctions in which sellers have private costs, and the auctioneer aims to maximize a utility function on subsets of items, under the constraint that the sum of the payments provided by the mechanism does not exceed a given budget. Standard mechanism design ideas such as the VCG mechanism and its variants are not applicable here. We show that, for general functions, the budget constraint can render mechanisms arbitrarily bad in terms of the utility of the buyer. However, our main result shows that for the important class of submodular functions, a bounded approximation ratio is achievable. Better approximation results are obtained for subclasses of the submodular functions. We explore the space of ...
Christos H. Papadimitriou, Yaron Singer
Added 01 Feb 2011
Updated 01 Feb 2011
Type Journal
Year 2010
Where CORR
Authors Christos H. Papadimitriou, Yaron Singer
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