Sampling and Optimal Preference Elicitation in Simple Mechanisms

TL;DR

This paper investigates efficient mechanism design with limited information elicitation, demonstrating that sampling and communication-efficient protocols can approximate optimal social costs and prices in various auction and facility location settings without prior valuation knowledge.

Contribution

It introduces sampling-based approximation methods for facility location and communication-efficient auction mechanisms, achieving near-optimal social costs and prices with minimal information exchange.

Findings

Sampling approximates the generalized median mechanism within 1+ε for large n.

Vickrey's rule can be implemented with 1+ε bits per bidder asymptotically.

Sampling-based ascending auctions achieve asymptotically optimal communication.

Abstract

In this work we are concerned with the design of efficient mechanisms while eliciting limited information from the agents. First, we study the performance of sampling approximations in facility location games. Our key result is to show that for any $\epsilon > 0$, a sample of size $c(\epsilon) = \Theta(1/\epsilon^2)$ yields in expectation a $1 + \epsilon$ approximation with respect to the optimal social cost of the generalized median mechanism on the metric space $(\mathbb{R}^d, \| \cdot \|_1)$, while the number of agents $n \to \infty$. Moreover, we study a series of exemplar environments from auction theory through a communication complexity framework, measuring the expected number of bits elicited from the agents; we posit that any valuation can be expressed with $k$ bits, and we mainly assume that $k$ is independent of the number of agents $n$. In this context, we show that Vickrey's rule can be implemented with an expected communication of $1 + \epsilon$ bits from an average bidder, for any $\epsilon > 0$, asymptotically matching the trivial lower bound. As a corollary, we provide a compelling method to increment the price in an English auction. We also leverage our single-item format with an efficient encoding scheme to prove that the same communication bound can be recovered in the domain of additive valuations through simultaneous ascending auctions, assuming that the number of items is a constant. Finally, we propose an ascending-type multi-unit auction under unit demand bidders; our mechanism announces at every round two separate prices and is based on a sampling algorithm that performs approximate selection with limited communication, leading again to asymptotically optimal communication. Our results do not require any prior knowledge on the agents' valuations, and mainly follow from natural sampling techniques.