Knightian auctions
Name
Chiesa, Micali, Zhu (2012) Knightian Auctions.pdf
Description
Author's final manuscript.
Size
823.79 KB
Format
Adobe PDF
Checksum (MD5)
40c7bac31b1f335f7bf4d58310917247
Author(s)
Chiesa, Alessandro
Micali, Silvio
Zhu, Zeyuan Allen
Date Issued
January 10, 2012
Publisher
© Massachusetts Institute of Technology
Citation
Chiesa, A., Micali, S., & Zhu, Z. A. (2012). Knightian auctions (ECIR Working Paper No. 2012-1). MIT Political Science Department.
Version
Author's final manuscript.
Series/Report no.
ECIR Working Paper No. 2012-1
Abstract
We study single-good auctions in a setting where each player knows his own valuation only within a constant multiplicative factor δ ∈ (0, 1), and the mech- anism designer knows δ. The classical notions of implementation in dominant strategies and implementation in undominated strategies are naturally extended to this setting, but their power is vastly different.
On the negative side, we prove that no dominant-strategy mechanism can guarantee social welfare that is significantly better than that achievable by as- signing the good to a random player.
On the positive side, we provide tight upper and lower bounds for the fraction of the maximum social welfare achievable in undominated strategies, whether deterministically or probabilistically.
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