Efficient Money Burning in General Domains
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Author(s)
Fotakis, Dimitris
Tsipras, Dimitris
Tzamos, Christos
Zampetakis, Emmanouil
Date Issued
November 2016
Journal
Theory of Computing Systems
Publisher
Springer US
Citation
Fotakis, Dimitris et al. “Efficient Money Burning in General Domains.” Theory of Computing Systems 59.4 (2016): 619–640.
Version
Author's final manuscript
Abstract
We study mechanism design where the objective is to maximize the residual surplus, i.e., the total value of the outcome minus the payments charged to the agents, by truthful mechanisms. The motivation comes from applications where the payments charged are not in the form of actual monetary transfers, but take the form of wasted resources. We consider a general mechanism design setting with m discrete outcomes and n multidimensional agents. We present two randomized truthful mechanisms that extract an O(logm) fraction of the maximum social surplus as residual surplus. The first mechanism achieves an O(logm)-approximation to the social surplus, which is improved to an O(1)-approximation by the second mechanism. An interesting feature of the second mechanism is that it optimizes over an appropriately restricted space of probability distributions, thus achieving an efficient tradeoff between social surplus and the total amount of payments charged to the agents.
MIT Department
Massachusetts Institute of Technology. Computer Science and Artificial Intelligence Laboratory
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1007/s00224-016-9720-2
