416. On the Efficiency of Fair and Truthful Trade Mechanisms
Invited abstract in session MA-53: Algorithmic Game Theory and Its Applications, stream Game Theory and Mathematical Economics.
Monday, 8:30-10:00Room: Liberty Moot Court
Authors (first author is the speaker)
| 1. | Yiding Feng
|
Abstract
We consider the impact of fairness requirements on the social efficiency of truthful mechanisms for trade, focusing on Bayesian bilateral-trade settings. Unlike the full information case in which all gains-from-trade can be realized and equally split between the two parties, in the private information setting, equitability has devastating welfare implications (even if only required to hold ex-ante). We thus search for an alternative fairness notion and suggest requiring the mechanism to be KS-fair: it must ex-ante equalize the fraction of the ideal utilities of the two traders. We show that there is always a KS-fair (simple) truthful mechanism with expected gains-from-trade that are half the optimum, but always ensuring any better fraction is impossible (even when the seller value is zero). We then restrict our attention to trade settings with a zero-value seller and a buyer with value distribution that is Regular or MHR, proving that much better fractions can be obtained under these conditions.
Keywords
- Auctions / Competitive Bidding
- Economic Modeling
- Revenue Management and Pricing
Status: accepted
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