A conjecture about the efficiency of first price mechanisms

TL;DR

This paper explores a conjecture suggesting that first price mechanisms are generally efficient across a broad class of problems involving a principal and exclusion rights, with implications for auctions and combinatorial settings.

Contribution

It introduces different versions of a conjecture proposing the broad efficiency of first price mechanisms in various problem classes.

Findings

Conjecture suggests first price mechanisms rarely perform poorly.

Definitions encompass most problems with a principal and exclusion rights.

Relevance extends to auctions and combinatorial problems.

Abstract

We present different versions of a conjecture which would express that first price mechanisms never work very badly in a very general class of problems. The definitions include most of the problems where there is a principal (seller) who has the right to exclude others from the game. The exact definitions are motivated by the "first price mechanism" in E Cs: "Efficient Teamwork", but the conjecture is relevant for most auction problems, e.g. for combinatorial auctions.