Simultaneous Auctions are Approximately Revenue-Optimal for Subadditive Bidders


We study revenue maximization in multi-item auctions, where bidders have subadditive valuations over independent items. Providing a simple mechanism that is approximately revenue-optimal in this setting is a major open problem in mechanism design. In this paper, we present the first simple mechanism whose revenue is at least a constant fraction of the optimal revenue in multi-item auctions with subadditive bidders. Our mechanism is a simultaneous auction that incorporates either a personalized entry fee or a personalized reserve price per item. We prove that for any simultaneous auction that satisfies $c$-efficiency – a new property we propose, its revenue is at least an $O(c)$-approximation to the optimal revenue. We further show that both the simultaneous first-price and the simultaneous all-pay auction are $1/2$-efficient. Providing revenue guarantees for non-truthful simple mechanisms, e.g., simultaneous auctions, in multi-dimensional environments has been recognized by Roughgarden et al. as an important open question. Prior to our result, the only such revenue guarantees are due to Daskalakis et al. for bidders who have additive valuations over independent items. Our result significantly extends the revenue guarantees of these non-truthful simple auctions to settings where bidders have combinatorial valuations.

Proceedings of the 64th IEEE Symposium on Foundations of Computer Science (FOCS)
Yang Cai
Yang Cai
Associate Professor