Multi-Unit Diffusion Auctions with Intermediaries
This addresses revenue issues in networked auctions with intermediaries, offering a practical solution for auction design in multi-agent systems.
The paper tackles the problem of incentivizing intermediaries to spread auction information in multi-unit auctions, showing that the VCG mechanism maximizes social welfare but can reduce seller revenue or cause deficits, and proposes a critical neighborhood auction that also improves seller revenue.
This paper studies multi-unit auctions powered by intermediaries, where each intermediary owns a private set of unit-demand buyers and all intermediaries are networked with each other. Our goal is to incentivize the intermediaries to diffuse the auction information to individuals they can reach, including their private buyers and neighboring intermediaries, so that more potential buyers are able to participate in the auction. To this end, we build a diffusion-based auction framework which incorporates the strategic interaction of intermediaries. It is showed that the classic Vickrey-Clarke-Groves (VCG) mechanism within the framework can achieve the maximum social welfare, but it may decrease the seller's revenue or even lead to a deficit. To overcome the revenue issue, we propose a novel auction, called critical neighborhood auction, which not only maximizes the social welfare, but also improves the seller's revenue comparing to the VCG mechanism with/without intermediaries.