A Competitive Posted-Price Mechanism for Online Budget-Feasible Auctions

TL;DR

This paper introduces a randomized online posted-price mechanism for budget-feasible auctions with sequential agents, achieving a constant competitive ratio and solving a key open problem in online procurement auctions.

Contribution

It presents the first mechanism with a constant competitive ratio for online procurement auctions under private costs, using an adaptive estimation approach.

Findings

Achieves a constant competitive ratio in online procurement settings.

Successfully estimates the optimal value within a constant factor.

Provides a practical randomized mechanism for online budget-constrained auctions.

Abstract

We consider online procurement auctions, where the agents arrive sequentially, in random order, and have private costs for their services. The buyer aims to maximize a monotone submodular value function for the subset of agents whose services are procured, subject to a budget constraint on their payments. We consider a posted-price setting where upon each agent's arrival, the buyer decides on a payment offered to them. The agent accepts or rejects the offer, depending on whether the payment exceeds their cost, without revealing any other information about their private costs whatsoever. We present a randomized online posted-price mechanism with constant competitive ratio, thus resolving the main open question of (Badanidiyuru, Kleinberg and Singer, EC 2012). Posted-price mechanisms for online procurement typically operate by learning an estimation of the optimal value, denoted as OPT, and using it to determine the payments offered to the agents. The main challenge is to learn OPT within a constant factor from the agents' accept / reject responses to the payments offered. Our approach is based on an online test of whether our estimation is too low compared against OPT and a carefully designed adaptive search that gradually refines our estimation.