A Geometric Analysis of Gains from Trade
Jason Hartline, Kangning Wang
TL;DR
This paper presents a geometric proof that the random proposer mechanism approximates the optimal gains from trade in bilateral exchange, improving the approximation ratio from 4 to 3.15.
Contribution
It introduces a geometric analysis method that refines the approximation ratio for the gains from trade in bilateral exchange mechanisms.
Findings
Random proposer mechanism is a 4-approximation to first-best gains.
Refined geometric analysis improves approximation ratio to 3.15.
Provides a new geometric proof technique for trade mechanisms.
Abstract
We provide a geometric proof that the random proposer mechanism is a -approximation to the first-best gains from trade in bilateral exchange. We then refine this geometric analysis to recover the state-of-the-art approximation ratio of .
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsLaw, logistics, and international trade