MENU-SIZE COMPLEXITY AND REVENUE CONTINUITY OF BUY-MANY MECHANISMS Yi Yifen eng Ten eng University of Wisconsin-Madison Joint work with Shuchi Chawla and Christos Tzamos (UW-Madison)
Buy-one mechanisms and buy-many mechanisms v( )=$1000000 v( )=v( )=$1 1 $5 2 1 $2 3 $999 βͺ A seller has π heterogeneous items to sell to a single buyer. βͺ Typical buy-one mechanisms: buyer interact with the seller once. βͺ Optimal strategy: purchases the third menu option, pay $999. Buy-many mechanisms: buyer interact with the mechanism multiple times. βͺ Optimal strategy: repeatedly purchase , then repeatedly purchase , pay $16 in expectation. βͺ
Menu-size complexity for near-optimal revenue βͺ How many menu options are needed for (1 β π) -approx in revenue? Buy- one mechanisms: infinite [Hart Nisanβ13]. βͺ βͺ Buy-many mechanisms: finite. Theorem 1. For any distribution πΈ and π β [0,1] , exists mechanism π with finite menu size π(π, π) , such that πππ€ πΈ π β₯ 1 β π πΆπ£π§ππππ§πππ€ πΈ . π π, π = 1/π 2 π(π) . βͺ βͺ The doubly-exponential dependency of n is tight. Theorem 2. There exists πΈ being a distribution over XOS functions, such that for any mechanism π with description complexity 2 2 π(π1/4) , πΆπ£π§ππππ§πππ€ πΈ β₯ π log π πππ€ πΈ π .
Revenue Continuity When the buyerβs values for the sets of items perturb multiplicatively slightly, how much does the βͺ revenue change? Any π€ βΌ πΈ is perturbed to π€ β² βΌ πΈβ² , such that π€ β² π β βͺ 1 β π π€(π), 1 + π π€(π) , βπ β [π] . Buy-one mechanisms: revenue may change significantly [Psomas et al.β19]. βͺ βͺ Continuity only holds for weaker additive perturbation [Rubinstein Weinbergβ15] [ Brustle et al.β20]. βͺ Buy-many mechanisms: revenue changes slightly. Theorem 3. For any value distribution πΈ and any 1 Β± π multiplicative perturbation πΈβ² , πΆπ£π§ππππ§πππ€ πΈβ² β₯ 1 β ππππ§ π, π πΆπ£π§ππππ§πππ€ πΈ . βͺ Note: such dependency on π is necessary. Theorem 4. There exists πΈ over unit-demand functions and a 1 Β± π multiplicative perturbation πΈβ² , such that πΆπ£π§ππππ§πππ€ πΈβ² β€ 1 ππ πΆπ£π§ππππ§πππ€ πΈ . βͺ Full paper: https://arxiv.org/abs/2003.10636
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