Prior-Free Clock Auctions for Bidders with Interdependent Values

TL;DR

This paper introduces prior-free ascending clock auctions for selling to bidders with interdependent values, achieving near-optimal social welfare and revenue guarantees with strong incentive compatibility.

Contribution

It develops a new auction framework that is prior-free, incentive-compatible, and effective for bidders with interdependent values, with bounds close to theoretical limits.

Findings

Upper and lower bounds on social welfare and revenue approximability.

Auction mechanisms are ex-post incentive compatible and form obvious equilibria.

Results hold across various settings parameterized by signal and group counts.

Abstract

We study the problem of selling a good to a group of bidders with interdependent values in a prior-free setting. Each bidder has a signal that can take one of $k$ different values, and her value for the good is a weakly increasing function of all the bidders' signals. The bidders are partitioned into $\ell$ expertise-groups, based on how their signal can impact the values for the good, and we prove upper and lower bounds regarding the approximability of social welfare and revenue for a variety of settings, parameterized by $k$ and $\ell$. Our lower bounds apply to all ex-post incentive compatible mechanisms and our upper bounds are all within a small constant of the lower bounds. Our main results take the appealing form of ascending clock auctions and provide strong incentives by admitting the desired outcomes as obvious ex-post equilibria.