We model the ultimate price paid by users of a decentralized ledger as resulting from a two-stage game where Miners (/Proposers/etc.) first purchase blockspace via a Tullock contest, and then price that space to users. When analyzing our distributed ledger model, we find: - A characterization of all possible pure equilibria (although pure equilibria are not guaranteed to exist). - A natural sufficient condition, implied by Regularity (à la [Myerson, 1981]), for existence of a "market-clearing" pure equilibrium where Miners choose to sell all space allocated by the Distributed Ledger Protocol, and that this equilibrium is unique. - The market share of the largest miner is the relevant "measure of decentralization" to determine whether a market-clearing pure equilibrium exists. - Block rewards do not impact users' prices at equilibrium, when pure equilibria exist. But, higher block rewards can cause pure equilibria to exist. We also discuss aspects of our model and how they relate to blockchains deployed in practice. For example, only "patient" users (who are happy for their transactions to enter the blockchain under any miner) would enjoy the conclusions highlighted by our model, whereas "impatient" users (who are interested only for their transaction to be included in the very next block) still face monopoly pricing.

We study the communication complexity of welfare maximization in combinatorial auctions with bidders from either a standard valuation class (which require exponential communication to state, such as subadditive or XOS), or arbitrary succinct valuations (which can be fully described in polynomial communication, such as single-minded). Although succinct valuations can be efficiently communicated, we show that additional succinct bidders have a nontrivial impact on communication complexity of classical combinatorial auctions.

In traditional algorithm design, no incentives come into play: the input is given, and your algorithm must produce a correct output. How much harder is it to solve the same problem when the input is not given directly, but instead reported by strategic agents with interests of their own? The unique challenge stems from the fact that the agents may choose to lie about the input in order to manipulate the behavior of the algorithm for their own interests, and tools from Game Theory are, therefore, required in order to predict how these agents will behave. We develop a new algorithmic framework with which to study such problems. Specifically, we provide a computationally efficient black-box reduction from solving any Bayesian optimization problem on “strategic input,” often called algorithmic mechanism design , to solving a perturbed version of that same optimization problem when the input is directly given, traditionally called algorithm design . We further demonstrate the power of our framework by making significant progress on several long-standing open problems. First, we provide an algorithmic extension of Myerson’s celebrated characterization of single item auctions [ 105 ] to multiple items, providing also a computationally efficient implementation of optimal auctions. Next, we design a computationally efficient 2-approximate mechanism for Bayesian job scheduling on unrelated machines, the original problem studied in Nisan and Ronen’s seminal article introducing the field of Algorithmic Mechanism Design [ 106 ]. This matches the guarantee of the best known computationally efficient algorithm when the input is directly given. Finally, leveraging a connection to our framework, we additionally prove hardness of approximation for Bayesian mechanism design with submodular bidders.

Selfish miners selectively withhold blocks to earn disproportionately high revenue. The vast majority of the selfish mining literature focuses exclusively on block rewards. [Carlsten et al., 2016] is a notable exception, observing that similar strategic behavior is profitable in a zero-block-reward regime (the endgame for Bitcoin’s quadrennial halving schedule) if miners are compensated with transaction fees alone. Neither model fully captures miner incentives today. The block reward remains 3.125 BTC, yet some blocks yield significantly higher revenue. For example, congestion during the launch of the Babylon protocol in August 2024 caused transaction fees to spike from 0.14 BTC to 9.52 BTC, a 68× increase in fees within two blocks. Our results are both practical and theoretical. Of practical interest, we study selfish mining profitability under a combined reward function that more accurately models miner incentives. This analysis enables us to make quantitative claims about protocol risk (e.g., the mining power at which a selfish strategy becomes profitable is reduced by 22% when optimizing over the combined reward function versus block rewards alone) and qualitative observations (e.g., a miner considering both block rewards and transaction fees will mine more or less aggressively respectively than if they cared about either alone). These practical results follow from our novel model and methodology, which constitute our theoretical contributions. We model general, time-accruing stochastic rewards in the Nakamoto Consensus Game, which requires explicit treatment of difficult adjustment and randomness; we characterize reward function structure through a set of properties (e.g., that rewards accrue only as a function of time since the parent block). We present a new methodology to analytically calculate expected selfish miner rewards under a broad class of stochastic reward functions and validate our method numerically by comparing it with the existing literature and simulating the combined reward sources directly.

Cryptographic protocols often make honesty assumptions---e.g., fewer than t out of n participants are adversarial. In practice, these assumptions can be hard to ensure, particularly given monetary incentives for participants to collude and deviate from the protocol.

For a set M of m elements, we define a decreasing chain of classes of normalized monotone-increasing valuation functions from 2^M to ℝ_{≥ 0}, parameterized by an integer q ∈ [2,m]. For a given q, we refer to the class as q-partitioning. A valuation function is subadditive if and only if it is 2-partitioning, and fractionally subadditive if and only if it is m-partitioning. Thus, our chain establishes an interpolation between subadditive and fractionally subadditive valuations. We show that this interpolation is smooth (q-partitioning valuations are "nearly" (q-1)-partitioning in a precise sense, Theorem 6), interpretable (the definition arises by analyzing the core of a cost-sharing game, à la the Bondareva-Shapley Theorem for fractionally subadditive valuations, Section 3.1), and non-trivial (the class of q-partitioning valuations is distinct for all q, Proposition 3). For domains where provable separations exist between subadditive and fractionally subadditive, we interpolate the stronger guarantees achievable for fractionally subadditive valuations to all q ∈ {2,…, m}. Two highlights are the following: 1) An Ω ((log log q)/(log log m))-competitive posted price mechanism for q-partitioning valuations. Note that this matches asymptotically the state-of-the-art for both subadditive (q = 2) [Paul Dütting et al., 2020], and fractionally subadditive (q = m) [Feldman et al., 2015]. 2) Two upper-tail concentration inequalities on 1-Lipschitz, q-partitioning valuations over independent items. One extends the state-of-the-art for q = m to q < m, the other improves the state-of-the-art for q = 2 for q > 2. Our concentration inequalities imply several corollaries that interpolate between subadditive and fractionally subadditive, for example: 𝔼[v(S)] ≤ (1 + 1/log q)Median[v(S)] + O(log q). To prove this, we develop a new isoperimetric inequality using Talagrand’s method of control by q points, which may be of independent interest. We also discuss other probabilistic inequalities and game-theoretic applications of q-partitioning valuations, and connections to subadditive MPH-k valuations [Tomer Ezra et al., 2019].

We investigate prophet inequalities with competitive ratios approaching 1, seeking to generalize k-uniform matroids. We first show that large girth does not suffice: for all k, there exists a matroid of girth ≥ k and a prophet inequality instance on that matroid whose optimal competitive ratio is 1/2. Next, we show k-fold matroid unions do suffice: we provide a prophet inequality with competitive ratio 1-O(√{(log k)/k}) for any k-fold matroid union. Our prophet inequality follows from an online contention resolution scheme. The key technical ingredient in our online contention resolution scheme is a novel bicriterion concentration inequality for arbitrary monotone 1-Lipschitz functions over independent items which may be of independent interest. Applied to our particular setting, our bicriterion concentration inequality yields "Chernoff-strength" concentration for a 1-Lipschitz function that is not (approximately) self-bounding.

We quantify the value of the monopoly's bargaining power in terms of competition complexity—that is, the number of additional bidders the monopoly must attract in simple auctions to match the expected revenue of the optimal mechanisms —within the setting of multi-item auctions. We show that for simple auctions that sell items separately, the competition complexity is Θ(n/α) in an environment with n original bidders under the slightly stronger assumption of α-strong regularity, in contrast to the standard regularity assumption in the literature, which requires Ω (n · ln m/n) additional bidders. This significantly reduces the value of learning the distribution to design the optimal mechanisms, especially in large markets with many items for sale. For simple auctions that sell items as a grand bundle, we establish a constant competition complexity bound in a single-bidder environment when the number of items is small or when the value distribution has a monotone hazard rate. Some of our competition complexity results also hold when we compete against the first best benchmark (i.e., optimal social welfare).

We study revenue maximization in multi-dimensional auctions with n bidders and m items. When the bidders are constant-demand and either the number of bidders or the number of items is a constant, we give a quasi-polynomial time algorithm that computes an ε-Bayesian Incentive Compatible (ε-BIC) mechanism that obtains at least a (1 - ε) faction of the expected revenue of the optimal Bayesian Incentive Compatible (BIC) mechanism. We obtain this guarantee even when the value distribution of each bidder is unbounded, extending the main result of [Kothari et al., 2019] from a single bidder to multiple bidders.

We study the communication complexity of truthful combinatorial auctions, and in particular the case where valuations are either subadditive or single-minded, which we denote with SubAddUSingleM. We show that for three bidders with valuations in SubAddUSingleM, any deterministic truthful mechanism that achieves at least a 0.366-approximation requires$\exp(m)$communication. In contrast, a natural extension of [Fei09] yields a non-truthful$\text{poly}(m)-\mathbf{communication}$protocol that achieves a$\frac{1}{2}-\mathbf{approximation}$, demonstrating a gap between the power of truthful mechanisms and non-truthful protocols for this problem. Our approach follows the taxation complexity framework laid out in [Dob16b], but applies this framework in a setting not encompassed by the techniques used in past work. In particular, the only successful prior application of this framework uses a reduction to simultaneous protocols which only applies for two bidders [AKSW20], whereas our three-player lower bounds are stronger than what can possibly arise from a two-player construction (since a trivial truthful auction guarantees a$\frac{1}{2}- \mathbf{approximation}$for two players).

We consider the problem of query-efficient global max-cut on a weighted undirected graph in the value oracle model examined by [RSW18]. Graph algorithms in this cut query model and other query models have recently been studied for various other problems such as min-cut, connectivity, bipartiteness, and triangle detection. Max-cut in the cut query model can also be viewed as a natural special case of submodular function maximization: on query $S \subseteq V$, the oracle returns the total weight of the cut between $S$ and $V \backslash S$. Our first main technical result is a lower bound stating that a deterministic algorithm achieving a $c$-approximation for any $c > 1/2$ requires $Ω(n)$ queries. This uses an extension of the cut dimension to rule out approximation (prior work of [GPRW20] introducing the cut dimension only rules out exact solutions). Secondly, we provide a randomized algorithm with $\tilde{O}(n)$ queries that finds a $c$-approximation for any $c < 1$. We achieve this using a query-efficient sparsifier for undirected weighted graphs (prior work of [RSW18] holds only for unweighted graphs). To complement these results, for most constants $c \in (0,1]$, we nail down the query complexity of achieving a $c$-approximation, for both deterministic and randomized algorithms (up to logarithmic factors). Analogously to general submodular function maximization in the same model, we observe a phase transition at $c = 1/2$: we design a deterministic algorithm for global $c$-approximate max-cut in $O(\log n)$ queries for any $c < 1/2$, and show that any randomized algorithm requires $Ω(n/\log n)$ queries to find a $c$-approximate max-cut for any $c > 1/2$. Additionally, we show that any deterministic algorithm requires $Ω(n^2)$ queries to find an exact max-cut (enough to learn the entire graph).

We provide a simple $(1-O(\frac{1}{\sqrt{k}}))$-selectable Online Contention Resolution Scheme for $k$-uniform matroids against a fixed-order adversary. If $A_i$ and $G_i$ denote the set of selected elements and the set of realized active elements among the first $i$ (respectively), our algorithm selects with probability $1-\frac{1}{\sqrt{k}}$ any active element $i$ such that $|A_{i-1}| + 1 \leq (1-\frac{1}{\sqrt{k}})\cdot \mathbb{E}[|G_i|]+\sqrt{k}$. This implies a $(1-O(\frac{1}{\sqrt{k}}))$ prophet inequality against fixed-order adversaries for $k$-uniform matroids that is considerably simpler than previous algorithms [Ala14, AKW14, JMZ22]. We also prove that no OCRS can be $(1-Ω(\sqrt{\frac{\log k}{k}}))$-selectable for $k$-uniform matroids against an almighty adversary. This guarantee is matched by the (known) simple greedy algorithm that accepts every active element with probability $1-Θ(\sqrt{\frac{\log k}{k}})$ [HKS07].

Real-life contractual relations typically involve repeated interactions between the principal and agent, where, despite theoretical appeal, players rarely use complex dynamic strategies and instead manage uncertainty through learning algorithms. In this paper, we initiate the study of repeated contracts with learning agents, focusing on those achieving no-regret outcomes. For the canonical setting where the agent’s actions result in success or failure, we present a simple, optimal solution for the principal: Initially provide a linear contract with scalar $\alpha > 0$, then switch to a zero-scalar contract. This shift causes the agent to “free-fall” through their action space, yielding non-zero rewards for the principal at zero cost. Interestingly, despite the apparent exploitation, there are instances where our dynamic contract can make \emph{both} players better off compared to the best static contract. We then broaden the scope of our results to general linearly-scaled contracts, and, finally, to the best of our knowledge, we provide the first analysis of optimization against learning agents with uncertainty about the time horizon.

Seminal work of Eyal and Sirer [2014] establishes that a strategic Bitcoin miner may strictly profit by deviating from the intended Bitcoin protocol, using a strategy now termed selfish mining. More specifically, any miner with > 1/3 of the total hashrate can earn bitcoin at a faster rate by selfish mining than by following the intended protocol (depending on network conditions, a lower fraction of hashrate may also suffice).

The competition complexity of an auction setting is the number of additional bidders needed such that the simple mechanism of selling items separately (with additional bidders) achieves greater revenue than the optimal but complex (randomized, prior-dependent, Bayesian-truthful) optimal mechanism without the additional bidders. Our main result settles the competition complexity of n bidders with additive values over m < n independent items at [EQUATION]. The [EQUATION] upper bound is due to [Beyhaghi and Weinberg, 2019], and our main result improves the prior lower bound of Ω (ln n) to [EQUATION].

Cryptographic Self-Selection is a paradigm employed by modern Proof-of-Stake consensus protocols to select a block-proposing "leader." Algorand [Chen and Micali, 2019] proposes a canonical protocol, and Ferreira et al. [2022] establish bounds f(α, β) on the maximum fraction of rounds a strategic player can lead as a function of their stake α and a network connectivity parameter β. While both their lower and upper bounds are non-trivial, there is a substantial gap between them (for example, they establish f(10%, 1) ∈ [10.08%, 21.12%]), leaving open the question of how significant of a concern these manipulations are. We develop computational methods to provably nail f(α, β) for any desired (α, β) up to arbitrary precision, and implement our method on a wide range of parameters (for example, we confirm f(10%, 1) ∈ [10.08%, 10.15%]).

Transaction Fee Mechanism Design---a rapidly-evolving research agenda initiated by Roughgarden [2021]---studies auctions run by untrusted miners for transaction inclusion in a blockchain. Under previously-considered desiderata, an auction is considered 'good' if, informally-speaking, each party (i.e., the miner, the users, and coalitions of both miners and users) has no incentive to deviate from the fixed and pre-determined protocol. In other words, previous works posit that a 'good' auction should be 'simple for users', 'simple for miners', and 'resistant to collusion'.

We consider truthful combinatorial auctions with items M = [m] for sale to n bidders, where each bidder i has a private monotone valuation function vi: 2M → ℝ+. Among truthful mechanisms, maximal-in-range (MIR) mechanisms (sometimes called VCG-based) achieve the best-known approximation guarantees among all poly-communication deterministic truthful mechanisms in all previously-studied settings. Our work settles the communication complexity necessary to achieve any approximation guarantee via an MIR mechanism. Specifically: Let MIRSubMod(m, k) denote the best approximation guarantee achievable by an MIR mechanism using 2k communication between bidders with submodular valuations over m items. Then for all k = Ω(log(m)), MIRSubMod(m,k) = Ω(√m/(klog(m/k))). When we set k = Θ(log(m)), this improves the previous best lower bound for polynomial communication maximal-in-range mechanisms from Ω(m1/3/log2/3(m)) to Ω(√m/log(m)). Additionally, MIRSubMod(m, k) = O(√m/k). Moreover, our mechanism can be implemented with 2k simultaneous value queries and computation, and is optimal with respect to the value query and computational/succinct representation models. The mechanism also works for bidders with subadditive valuations. When k = Θ(log(m)), this improves the previous best approximation guarantee for polynomial communication maximal-in-range mechanisms from O(√m) to O(√m/log(m)). Let also MIRGen(m,k) denote the best approximation guarantee achievable by an MIR mechanism using 2k communication between bidders with general valuations over m items. Then for all k = Ω(log(m)), MIRGen(m, k) = Ω(m/k). When k = Θ(log(m)), this improves the previous best lower bound for polynomial communication maximal-in-range mechanisms from Ω(m/log2(m)) to Ω(m/log(m)). Additionally, MIRGen(m, k) = O(m/k). Moreover, our mechanism can be implemented with 2k simultaneous value queries and computation, and is optimal with respect to the value query and computational/succinct representation models. When k = Θ(log(m)), this improves the previous best approximation guarantee for polynomial communication maximal-in-range mechanisms from O(m/√log(m)) to O(m/log(m)).

We consider prophet inequalities subject to feasibility constraints that are the intersection of $q$ matroids. The best-known algorithms achieve a $Θ(q)$-approximation, even when restricted to instances that are the intersection of $q$ partition matroids, and with i.i.d.~Bernoulli random variables. The previous best-known lower bound is $Θ(\sqrt{q})$ due to a simple construction of [Kleinberg-Weinberg STOC 2012] (which uses i.i.d.~Bernoulli random variables, and writes the construction as the intersection of partition matroids). We establish an improved lower bound of $q^{1/2+Ω(1/\log \log q)}$ by writing the construction of [Kleinberg-Weinberg STOC 2012] as the intersection of asymptotically fewer partition matroids. We accomplish this via an improved upper bound on the product dimension of a graph with $p^p$ disjoint cliques of size $p$, using recent techniques developed in [Alon-Alweiss European Journal of Combinatorics 2020].

We consider a revenue-maximizing seller with a single item for sale to multiple buyers with i.i.d. valuations. Akbarpour and Li (2020) show that the only optimal, credible, strategyproof auction is the ascending price auction with reserves which has unbounded communication complexity. Recent work of Ferreira and Weinberg (2020) circumvents their impossibility result assuming the existence of cryptographically secure commitment schemes, and designs a two-round credible, strategyproof, optimal auction. However, their auction is only credible when buyers' valuations are MHR or $α$-strongly regular: they show their auction might not be credible even when there is a single buyer drawn from a non-MHR distribution. In this work, under the same cryptographic assumptions, we identify a new single-item auction that is credible, strategyproof, revenue optimal, and terminates in constant rounds in expectation for all distributions with finite monopoly price.

We consider a revenue-maximizing seller with $k$ heterogeneous items for sale to a single additive buyer, whose values are drawn from a known, possibly correlated prior $\mathcal{D}$. It is known that there exist priors $\mathcal{D}$ such that simple mechanisms --- those with bounded menu complexity --- extract an arbitrarily small fraction of the optimal revenue~(Briest et al. 2015, Hart and Nisan 2019). This paper considers the opposite direction: given a correlated distribution $\mathcal{D}$ witnessing an infinite separation between simple and optimal mechanisms, what can be said about $\mathcal{D}$?\citet{hart2019selling} provides a framework for constructing such $\mathcal{D}$: it takes as input a sequence of $k$-dimensional vectors satisfying some geometric property, and produces a $\mathcal{D}$ witnessing an infinite gap. Our first main result establishes that this framework is without loss: every $\mathcal{D}$ witnessing an infinite separation could have resulted from this framework. An earlier version of their work provided a more streamlined framework (Hart and Nisan 2013). Our second main result establishes that this restrictive framework is not tight. That is, we provide an instance $\mathcal{D}$ witnessing an infinite gap, but which provably could not have resulted from the restrictive framework. As a corollary, we discover a new kind of mechanism which can witness these infinite separations on instances where the previous ``aligned'' mechanisms do not.

We consider the manipulability of tournament rules which take the results of (n2) pairwise matches and select a ranking over the teams. Prior work designs simple tournament rules such that no pair of teams can manipulate the outcome of their match to improve their probability of being ranked first by more than 1/3, and this is the best possible among any Condorcet-consistent tournament rule (which selects an undefeated team whenever one exists) [15,16]. We initiate the consideration of teams who may manipulate their match to improve their ranking (not necessarily to reach first).

Cryptographic Self-Selection is a subroutine used to select a leader for modern proof-of-stake consensus protocols. In cryptographic self-selection, each round r has a seed Qr. In round r, each account owner is asked to digitally sign Qr, hash their digital signature to produce a credential, and then broadcast this credential to the entire network. A publicly-known function scores each credential in a manner so that the distribution of the lowest scoring credential is identical to the distribution of stake owned by each account. The user who broadcasts the lowest-scoring credential is the leader for round r, and their credential becomes the seed Qr+1. Such protocols leave open the possibility of manipulation: a user who owns multiple accounts that each produce low-scoring credentials in round r can selectively choose which ones to broadcast in order to influence the seed for round r+1. Indeed, the user can pre-compute their credentials for round r+1 for each potential seed, and broadcast only the credential (among those with low enough score to be leader) that produces the most favorable seed.

The Colonel Blotto game and its variants are a common approach to study competitive allocation of interchangeable resources (e.g., soldiers, money, or votes). We introduce a new variant of Blotto, which we call the Derby game, to study competitive allocation of non-interchangeable resources, such as campaign surrogates in politics or skilled workers in companies, and analyze its Nash equilibria. While Derby games unsurprisingly admit no pure Nash equilibria, our main results surprisingly show that Nash equilibria generically exist where one player plays a pure strategy, and we give necessary and sufficient conditions for such equilibria.

We introduce locality: a new property of multi-bidder auctions that formally separates the simplicity of optimal single-dimensional multi-bidder auctions from the complexity of optimal multi-dimensional multi-bidder auctions. Specifically, consider the revenue-optimal, Bayesian Incentive Compatible auction for buyers with valuations drawn from D-> :=xi Di, where each distribution has support-size n. This auction takes as input a valuation profile v-> and produces as output an allocation of the items and prices to charge, Opt D-> (v->). When each Di is single-dimensional, this mapping is locally-implementable: defining each input vi requires Θ(log n) bits, and Opt D-> (v->) can be fully determined using just Θ(log n) bits from each Di. This follows immediately from Myerson's virtual value theory [36].

We provide the first separation in the approximation guarantee achievable by truthful and nontruthful algorithms for combinatorial auctions with polynomial communication. Specifically, we prove that any truthful mechanism guaranteeing a $(\nicefrac{3}{4}-\nicefrac{1}{240}+\varepsilon)$-approximation for two buyers with XOS valuations over $m$ items requires $\exp(\Omega(\varepsilon^2 \cdot m))$ communication, whereas a nontruthful algorithm by Dobzinski and Schapira [ Proceedings of the Seventeenth Annual ACM-SIAM Symposium on Discrete Algorithms (SODA), SIAM, 2006, pp. 1064--1073] and Feige [ SIAM J. Comput., 39 (2009), pp. 122--142] is already known to achieve a $\nicefrac{3}{4}$-approximation in ${poly}(m)$ communication. We obtain our separation by proving that any simultaneous protocol (not necessarily truthful) which guarantees a $(\nicefrac{3}{4}-\nicefrac{1}{240}+\varepsilon)$-approximation requires communication $\exp(\Omega(\varepsilon^2 \cdot m))$. The taxation complexity framework of Dobzinski [ Proceedings of the 57th Annual Symposium on Foundations of Computer Science (FOCS), IEEE, 2016, pp. 209--218] extends this lower bound to all truthful mechanisms (including interactive truthful mechanisms).

Designing an incentive compatible auction that maximizes expected revenue is a central problem in Auction Design. Theoretical approaches to the problem have hit some limits in the past decades and analytical solutions are known for only a few simple settings. Computational approaches to the problem through the use of LPs have their own set of limitations. Building on the success of deep learning, a new approach was recently proposed by Duetting et al. (2019) in which the auction is modeled by a feed-forward neural network and the design problem is framed as a learning problem. The neural architectures used in that work are general purpose and do not take advantage of any of the symmetries the problem could present, such as permutation equivariance. In this work, we consider auction design problems that have permutation-equivariant symmetry and construct a neural architecture that is capable of perfectly recovering the permutation-equivariant optimal mechanism, which we show is not possible with the previous architecture. We demonstrate that permutation-equivariant architectures are not only capable of recovering previous results, they also have better generalization properties.

We study the problem of repeatedly auctioning off an item to one of k bidders where: a) bidders have a per-round individual rationality constraint, b) bidders may leave the mechanism at any point, and c) the bidders' valuations are adversarially chosen (the prior-free setting). Without these constraints, the auctioneer can run a second-price auction to "sell the business" and receive the second highest total value for the entire stream of items. We show that under these constraints, the auctioneer can attain a constant fraction of the "sell the business" benchmark, but no more than $2/e$ of this benchmark.

Proof-of-Stake blockchains based on a longest-chain consensus protocol are an attractive energy-friendly alternative to the Proof-of-Work paradigm. However, formal barriers to "getting the incentives right" were recently discovered, driven by the desire to use the blockchain itself as a source of pseudorandomness. We consider instead a longest-chain Proof-of-Stake protocol with perfect, trusted, external randomness (e.g. a randomness beacon). We produce two main results. First, we show that a strategic miner can strictly outperform an honest miner with just 32.8% of the total stake. Note that a miner of this size cannot outperform an honest miner in the Proof-of-Work model. This establishes that even with access to a perfect randomness beacon, incentives in Proof-of-Work and Proof-of-Stake longest-chain protocols are fundamentally different. Second, we prove that a strategic miner cannot outperform an honest miner with 30.8% of the total stake. This means that, while not quite as secure as the Proof-of-Work regime, desirable incentive properties of Proof-of-Work longest-chain protocols can be approximately recovered via Proof-of-Stake with a perfect randomness beacon. The space of possible strategies in a Proof-of-Stake mining game is significantly richer than in a Proof-of-Work game. Our main technical contribution is a characterization of potentially optimal strategies for a strategic miner, and in particular a proof that the corresponding infinite-state MDP admits an optimal strategy that is positive recurrent.

All proper scoring rules incentivize an expert to predict accurately (report their true estimate), but not all proper scoring rules equally incentivize precision. Rather than treating the expert's belief as exogenously given, we consider a model where a rational expert can endogenously refine their belief by repeatedly paying a fixed cost, and is incentivized to do so by a proper scoring rule. Specifically, our expert aims to predict the probability that a biased coin flipped tomorrow will land heads, and can flip the coin any number of times today at a cost of c per flip. Our first main result defines an incentivization index for proper scoring rules, and proves that this index measures the expected error of the expert's estimate (where the number of flips today is chosen adaptively to maximize the predictor's expected payoff). Our second main result finds the unique scoring rule which optimizes the incentivization index over all proper scoring rules. We also consider extensions to minimizing the lth moment of error, and again provide an incentivization index and optimal proper scoring rule. In some cases, the resulting scoring rule is differentiable, but not infinitely differentiable. In these cases, we further prove that the optimum can be uniformly approximated by polynomial scoring rules. Finally, we compare common scoring rules via our measure, and include simulations confirming the relevance of our measure even in domains outside where it provably applies.

We consider the problem of implementing a fixed social choice function between multiple players (which takes as input a type ti from each player i and outputs an outcome f(t1,…, tn)), in which each player must be incentivized to follow the protocol. In particular, we study the communication requirements of a protocol which: (a) implements f, (b) implements f and computes payments that make it ex-post incentive compatible (EPIC) to follow the protocol, and (c) implements f and computes payments in a way that makes it dominant-strategy incentive compatible (DSIC) to follow the protocol.

We consider the sample complexity of revenue maximization for multiple bidders in unrestricted multi-dimensional settings. Specifically, we study the standard model of additive bidders whose values for heterogeneous items are drawn independently. For any such instance and any , we show that it is possible to learn an -Bayesian Incentive Compatible auction whose expected revenue is within of the optimal -BIC auction from only polynomially many samples. Our fully nonparametric approach is based on ideas that hold quite generally and completely sidestep the difficulty of characterizing optimal (or near-optimal) auctions for these settings. Therefore, our results easily extend to general multi-dimensional settings, including valuations that are not necessarily even subadditive , and arbitrary allocation constraints. For the cases of a single bidder and many goods, or a single parameter (good) and many bidders, our analysis yields exact incentive compatibility (and for the latter also computational efficiency). Although the single-parameter case is already well understood, our corollary for this case extends slightly the state of the art.

We provide a unified view of many recent developments in Bayesian mechanism design, including the black-box reductions of Cai, Daskalakis, and Weinberg [in Proceedings of the 54th Annual IEEE Symposium on Foundations of Computer Science, 2013], simple auctions for additive buyers [S. Hart and N. Nisan, in Proceedings of the 13th ACM Conference on Electronic Commerce, 2012], and posted-price mechanisms for unit-demand buyers [S. Chawla, J. D. Hartline, and R. D. Kleinberg, in Proceedings of the 8th ACM Conference on Electronic Commerce, 2007, pp. 243--251]. Additionally, we show that viewing these three previously disjoint lines of work through the same lens leads to new developments as well. First, we provide a duality framework for Bayesian mechanism design, which naturally accommodates multiple agents and arbitrary objectives/feasibility constraints. Using this, we prove that either a posted-price mechanism or the Vickrey--Clarke--Groves auction with per-bidder entry fees achieves a constant factor of the optimal revenue achievable by a Bayesian Incentive Compatible mechanism whenever buyers are unit-demand or additive, unifying previous breakthroughs of Chawla et al. [in Proceedings of the 42nd ACM Symposium on Theory of Computing, 2010] and Yao [in Proceedings of the Twenty-Sixth Annual ACM-SIAM Symposium on Discrete Algorithms, 2015, pp. 92--109], and improving both approximation ratios (from 30 to 24 and 69 to 8, respectively). Finally, we show that this view also leads to improved structural characterizations in the framework of Cai, Daskalakis, and Weinberg.

Poverty and economic hardship are understood to be highly complex and dynamic phenomena. Due to the multi-faceted nature of welfare, assistance programs targeted at alleviating hardship can face challenges, as they often rely on simpler welfare measurements, such as income or wealth, that fail to capture to full complexity of each family's state. Here, we explore one important dimension – susceptibility to income shocks. We introduce a model of welfare that incorporates income, wealth, and income shocks and analyze this model to show that it can vary, at times substantially, from measures of welfare that only use income or wealth. We then study the algorithmic problem of optimally allocating subsidies in the presence of income shocks. We consider two well-studied objectives: the first aims to minimize the expected number of agents that fall below a given welfare threshold (a min-sum objective) and the second aims to minimize the likelihood that the most vulnerable agent falls below this threshold (a min-max objective). We present optimal and near-optimal algorithms for various general settings. We close with a discussion on future directions on allocating societal resources and ethical implications of related approaches.

We study information aggregation in networks where agents make binary decisions (labeled incorrect or correct). Agents initially form independent private beliefs about the better decision, which is correct with probability $1/2+δ$. The dynamics we consider are asynchronous (each round, a single agent updates their announced decision) and non-Bayesian (agents simply copy the majority announcements among their neighbors, tie-breaking in favor of their private signal). Our main result proves that when the network is a tree formed according to the preferential attachment model \cite{BarabasiA99}, with high probability, the process stabilizes in a correct majority within $O(n \log n/ \log\log n)$ rounds. We extend our results to other tree structures, including balanced $M$-ary trees for any $M$.

This paper seeks to establish a framework for directing a society of simple, specialized, self-interested agents to solve what traditionally are posed as monolithic single-agent sequential decision problems. What makes it challenging to use a decentralized approach to collectively optimize a central objective is the difficulty in characterizing the equilibrium strategy profile of non-cooperative games. To overcome this challenge, we design a mechanism for defining the learning environment of each agent for which we know that the optimal solution for the global objective coincides with a Nash equilibrium strategy profile of the agents optimizing their own local objectives. The society functions as an economy of agents that learn the credit assignment process itself by buying and selling to each other the right to operate on the environment state. We derive a class of decentralized reinforcement learning algorithms that are broadly applicable not only to standard reinforcement learning but also for selecting options in semi-MDPs and dynamically composing computation graphs. Lastly, we demonstrate the potential advantages of a society’s inherent modular structure for more efficient transfer learning.

State-of-the-art posted-price mechanisms for submodular bidders with m items achieve approximation guarantees of O((log log m)^3) [Sepehr Assadi and Sahil Singla, 2019]. Their truthfulness, however, requires bidders to compute an NP-hard demand-query. Some computational complexity of this form is unavoidable, as it is NP-hard for truthful mechanisms to guarantee even an m^(1/2-ε)-approximation for any ε > 0 [Shahar Dobzinski and Jan Vondrák, 2016]. Together, these establish a stark distinction between computationally-efficient and communication-efficient truthful mechanisms. We show that this distinction disappears with a mild relaxation of truthfulness, which we term implementation in advised strategies. Specifically, advice maps a tentative strategy either to that same strategy itself, or one that dominates it. We say that a player follows advice as long as they never play actions which are dominated by advice. A poly-time mechanism guarantees an α-approximation in implementation in advised strategies if there exists advice (which runs in poly-time) for each player such that an α-approximation is achieved whenever all players follow advice. Using an appropriate bicriterion notion of approximate demand queries (which can be computed in poly-time), we establish that (a slight modification of) the [Sepehr Assadi and Sahil Singla, 2019] mechanism achieves the same O((log log m)^3)-approximation in implementation in advised strategies.

We consider submodular function minimization in the oracle model: given black-box access to a submodular set function f:2^[n] → ℝ, find an element of arg min_S {f(S)} using as few queries to f(⋅) as possible. State-of-the-art algorithms succeed with Õ(n²) queries [Yin Tat Lee et al., 2015], yet the best-known lower bound has never been improved beyond n [Nicholas J. A. Harvey, 2008]. We provide a query lower bound of 2n for submodular function minimization, a 3n/2-2 query lower bound for the non-trivial minimizer of a symmetric submodular function, and a binom{n}{2} query lower bound for the non-trivial minimizer of an asymmetric submodular function. Our 3n/2-2 lower bound results from a connection between SFM lower bounds and a novel concept we term the cut dimension of a graph. Interestingly, this yields a 3n/2-2 cut-query lower bound for finding the global mincut in an undirected, weighted graph, but we also prove it cannot yield a lower bound better than n+1 for s-t mincut, even in a directed, weighted graph.

We study the single-choice Prophet Inequality problem when the gambler is given access to samples. We show that the optimal competitive ratio of $1/2$ can be achieved with a single sample from each distribution. When the distributions are identical, we show that for any constant $\varepsilon > 0$, $O(n)$ samples from the distribution suffice to achieve the optimal competitive ratio ($\approx 0.745$) within $(1+\varepsilon)$, resolving an open problem of Correa, Dütting, Fischer, and Schewior.

We consider the manipulability of tournament rules, in which $n$ teams play a round robin tournament and a winner is (possibly randomly) selected based on the outcome of all $\binom{n}{2}$ matches. Prior work defines a tournament rule to be $k$-SNM-$α$ if no set of $\leq k$ teams can fix the $\leq \binom{k}{2}$ matches among them to increase their probability of winning by $>α$ and asks: for each $k$, what is the minimum $α(k)$ such that a Condorcet-consistent (i.e. always selects a Condorcet winner when one exists) $k$-SNM-$α(k)$ tournament rule exists? A simple example witnesses that $α(k) \geq \frac{k-1}{2k-1}$ for all $k$, and [Schneider et al., 2017] conjectures that this is tight (and prove it is tight for $k=2$). Our first result refutes this conjecture: there exists a sufficiently large $k$ such that no Condorcet-consistent tournament rule is $k$-SNM-$1/2$. Our second result leverages similar machinery to design a new tournament rule which is $k$-SNM-$2/3$ for all $k$ (and this is the first tournament rule which is $k$-SNM-$(<1)$ for all $k$). Our final result extends prior work, which proves that single-elimination bracket with random seeding is $2$-SNM-$1/3$([Schneider et al., 2017]), in a different direction by seeking a stronger notion of fairness than Condorcet-consistence. We design a new tournament rule, which we call Randomized-King-of-the-Hill, which is $2$-SNM-$1/3$ and \emph{cover-consistent} (the winner is an uncovered team with probability $1$).

We consider a revenue-maximizing single seller with mitems for sale to a single buyer whose value v(·) for the items is drawn from a known distribution Dof support k. A series of works by Cai et al. establishes that when each v(·) in the support of Dis additive or unit-demand (or c-demand), the revenue-optimal auction can be found in poly(m,k) time.

We consider optimal (revenue maximizing) mechanism design in the interdimensional setting, where one dimension is the 'value' of the buyer, and the other is a 'type' that captures some auxiliary information. A prototypical example of this is the FedEx Problem, for which Fiat et al. [2016] characterize the optimal mechanism for a single agent. Another example of this is when the type encodes the buyer's budget [DW17]. The question we address is how far can such characterizations goIn particular, we consider the setting of single-minded agents. A seller has heterogenous items. A buyer has a valuation vfor a specific subset of items S, and obtains value vif and only if he gets all the items in S(and potentially some others too).

We consider the sale of a single item to multiple buyers by a revenue-maximizing seller. Recent work of Akbarpour and Li formalizes credibility as an auction desideratum, and prove that the only optimal, credible, strategyproof auction is the ascending price auction with reserves. In contrast, when buyers' valuations are MHR, we show that the mild additional assumption of a cryptographically secure commitment scheme suffices for a simple two-round auction which is optimal, strategyproof, and credible (even when the number of bidders is only known by the auctioneer).

We prove the first separation in the approximation guarantee achievable by truthful and non-truthful combinatorial auctions with polynomial communication. Specifically, we prove that any truthful auction guaranteeing a (34−1240+є)-approximation for two buyers with XOS valuations over m items requires exp(Ω(ε2 · m)) communication whereas a non-truthful auction by Feige [J. Comput. 2009] is already known to achieve a 34-approximation in (m) communication.

We consider a monopolist seller with n heterogeneous items, facing a single buyer. The buyer has a value for each item drawn independently according to (non-identical) distributions, and her value for a set of items is additive. The seller aims to maximize his revenue. We suggest using the a priori better of two simple pricing methods: selling the items separately , each at its optimal price, and bundling together , in which the entire set of items is sold as one bundle at its optimal price. We show that for any distribution, this mechanism achieves a constant-factor approximation to the optimal revenue. Beyond its simplicity, this is the first computationally tractable mechanism to obtain a constant-factor approximation for this multi-parameter problem. We additionally discuss extensions to multiple buyers and to valuations that are correlated across items.

We study a strategic version of the multi-armed bandit problem, where each arm is an individual strategic agent and we, the principal, pull one arm each round. When pulled, the arm receives some private reward $v_a$ and can choose an amount $x_a$ to pass on to the principal (keeping $v_a-x_a$ for itself). All non-pulled arms get reward $0$. Each strategic arm tries to maximize its own utility over the course of $T$ rounds. Our goal is to design an algorithm for the principal incentivizing these arms to pass on as much of their private rewards as possible. When private rewards are stochastically drawn each round ($v_a^t \leftarrow D_a$), we show that: \begin{itemize} \item Algorithms that perform well in the classic adversarial multi-armed bandit setting necessarily perform poorly: For all algorithms that guarantee low regret in an adversarial setting, there exist distributions $D_1,\ldots,D_k$ and an $o(T)$-approximate Nash equilibrium for the arms where the principal receives reward $o(T)$. \item There exists an algorithm for the principal that induces a game among the arms where each arm has a dominant strategy. Moreover, for every $o(T)$-approximate Nash equilibrium, the principal receives expected reward $\mu’T - o(T)$, where $\mu’$ is the second-largest of the means $\mathbb{E}[D_{a}]$. This algorithm maintains its guarantee if the arms are non-strategic ($x_a = v_a$), and also if there is a mix of strategic and non-strategic arms. \end{itemize}

We study the communication complexity of welfare maximization in combinatorial auctions with m items and two players with subadditive valuations. We show that outperforming the trivial 1/2-approximation requires exponential communication, settling an open problem of Dobzinski, Nisan and Schapira [STOC’05, MOR’10] and Feige [STOC’06, SICOMP ’09]. To derive our results, we introduce a new class of subadditive functions that are “far from” fractionally subadditive (XOS) functions, and establish randomized communication lower bounds for a new “near-EQUALITY” problem, both of which may be of independent interest.

We consider a revenue-maximizing seller with n items facing a single buyer. We introduce the notion of symmetric menu complexity of a mechanism, which counts the number of distinct options the buyer may purchase, up to permutations of the items. Our main result is that a mechanism of quasi-polynomial symmetric menu complexity suffices to guarantee a (1 - epsilon )-approximation when the buyer is unit-demand over independent items, even when the value distribution is unbounded, and that this mechanism can be found in quasi-polynomial time. Our key technical result is a polynomial-time, (symmetric) menu-complexity-preserving black-box reduction from achieving a (1 - epsilon )-approximation for unbounded valuations that are subadditive over independent items to achieving a (1 - O(epsilon ))-approximation when the values are bounded (and still subadditive over independent items). We further apply this reduction to deduce approximation schemes for a suite of valuation classes beyond our main result. Finally, we show that selling separately (which has exponential menu complexity) can be approximated up to a (1 - epsilon ) factor with a menu of efficient-linear (f (epsilon) · n) symmetric menu complexity.

The Competition Complexity of an auction setting refers to the number of additional bidders necessary in order for the (deterministic, prior-independent, dominant strategy truthful) Vickrey-Clarke-Groves mechanism to achieve greater revenue than the (randomized, prior-dependent, Bayesian-truthful) optimal mechanism without the additional bidders.

We consider the problem of regulating products with negative externalities to a third party that is neither the buyer nor the seller, but where both the buyer and seller can take steps to mitigate the externality. The motivating example to have in mind is the sale of Internet-of-Things (IoT) devices, many of which have historically been compromised for DDoS attacks that disrupted Internet-wide services such as Twitter [5, 26]. Neither the buyer (i.e., consumers) nor seller (i.e., IoT manufacturers) was known to suffer from the attack, but both have the power to expend effort to secure their devices. We consider a regulator who regulates payments (via fines if the device is compromised, or market prices directly), or the product directly via mandatory security requirements.

We consider the sample complexity of revenue maximization for multiple bidders in unrestricted multi-dimensional settings. Specifically, we study the standard model of n additive bidders whose values for m heterogeneous items are drawn independently. For any such instance and any ε>0, we show that it is possible to learn an ε-Bayesian Incentive Compatible auction whose expected revenue is within ε of the optimal ε-BIC auction from only polynomially many samples. Our approach is based on ideas that hold quite generally, and completely sidestep the difficulty of characterizing optimal (or near-optimal) auctions for these settings. Therefore, our results easily extend to general multi-dimensional settings, including valuations that aren't necessarily even subadditive, and arbitrary allocation constraints. For the cases of a single bidder and many goods, or a single parameter (good) and many bidders, our analysis yields exact incentive compatibility (and for the latter also computational efficiency). Although the single-parameter case is already well-understood, our corollary for this case extends slightly the state-of-the-art.

We give query-efficient algorithms for the global min-cut and the s-t cut problem in unweighted, undirected graphs. Our oracle model is inspired by the submodular function minimization problem: on query S \subset V, the oracle returns the size of the cut between S and V \ S. We provide algorithms computing an exact minimum $s$-$t$ cut in $G$ with ~{O}(n^{5/3}) queries, and computing an exact global minimum cut of G with only ~{O}(n) queries (while learning the graph requires ~{\Theta}(n^2) queries).

We consider the problem of a single seller repeatedly selling a single item to a single buyer (specifically, the buyer has a value drawn fresh from known distribution D in every round). Prior work assumes that the buyer is fully rational and will perfectly reason about how their bids today affect the seller's decisions tomorrow. In this work we initiate a different direction: the buyer simply runs a no-regret learning algorithm over possible bids. We provide a fairly complete characterization of optimal auctions for the seller in this domain. Specifically: - If the buyer bids according to EXP3 (or any "mean-based" learning algorithm), then the seller can extract expected revenue arbitrarily close to the expected welfare. This auction is independent of the buyer's valuation D , but somewhat unnatural as it is sometimes in the buyer's interest to overbid. - There exists a learning algorithm A such that if the buyer bids according to A then the optimal strategy for the seller is simply to post the Myerson reserve for D every round. - If the buyer bids according to EXP3 (or any "mean-based" learning algorithm), but the seller is restricted to "natural" auction formats where overbidding is dominated (e.g. Generalized First-Price or Generalized Second-Price), then the optimal strategy for the seller is a pay-your-bid format with decreasing reserves over time. Moreover, the seller's optimal achievable revenue is characterized by a linear program, and can be unboundedly better than the best truthful auction yet simultaneously unboundedly worse than the expected welfare.

We consider the following communication problem: Alice and Bob each have some valuation functions υ1(·) and υ2(·) over subsets of m items, and their goal is to partition the items into S, in a way that maximizes the welfare, . We study both the allocation problem, which asks for a welfare-maximizing partition and the decision problem, which asks whether or not there exists a partition guaranteeing certain welfare, for binary XOS valuations. For interactive protocols with poly(m) communication, a tight 3/4-approximation is known for both [29, 23]. For interactive protocols, the allocation problem is provably harder than the decision problem: any solution to the allocation problem implies a solution to the decision problem with one additional round and log m additional bits of communication via a trivial reduction. Surprisingly, the allocation problem is provably easier for simultaneous protocols. Specifically, we show: There exists a simultaneous, randomized protocol with polynomial communication that selects a partition whose expected welfare is at least 3/4 of the optimum. This matches the guarantee of the best interactive, randomized protocol with polynomial communication. For all ε > 0, any simultaneous, randomized protocol that decides whether the welfare of the optimal partition is ≥ 1 or ≤ 3/4 – 1/108 + ε correctly with probability > 1/2 + 1/poly(m) requires exponential communication. This provides a separation between the attainable approximation guarantees via interactive (3/4) versus simultaneous (≤ 3/4 – 1/108) protocols with polynomial communication. In other words, this trivial reduction from decision to allocation problems provably requires the extra round of communication. We further discuss the implications of our results for the design of truthful combinatorial auctions in general, and extensions to general XOS valuations. In particular, our protocol for the allocation problem implies a new style of truthful mechanisms.

We study the menu complexity of optimal and approximately-optimal auctions in the context of the “FedEx” problem, a so-called “one-and-a-half-dimensional” setting where a single bidder has both a value and a deadline for receiving an item [FGKK16]. The menu complexity of an auction is equal to the number of distinct (allocation, price) pairs that a bidder might receive [HN13]. We show the following when the bidder has n possible deadlines: Exponential menu complexity is necessary to be exactly optimal: There exist instances where the optimal mechanism has menu complexity ≥ 2n – 1. This matches exactly the upper bound provided by Fiat et al.'s algorithm, and resolves one of their open questions [FGKK16]. Fully polynomial menu complexity is necessary and sufficient for approximation: For all instances, there exists a mechanism guaranteeing a multiplicative (1 – ∊)-approximation to the optimal revenue with menu complexity , where υmax denotes the largest value in the support of integral distributions. There exist instances where any mechanism guaranteeing a multiplicative (1 – O(1/n2))-approximation to the optimal revenue requires menu complexity Ω(n2). Our main technique is the polygon approximation of concave functions [Rot92], and our results here should be of independent interest. We further show how our techniques can be used to resolve an open question of [DW17] on the menu complexity of optimal auctions for a budget-constrained buyer.

A cloud computing cluster equipped with a deadline-aware job scheduler faces fairness and efficiency challenges when greedy users falsely advertise the urgency of their jobs. Penalizing such untruthfulness without demotivating users from using the cloud service calls for advanced mechanism design techniques that work together with deadline-aware job scheduling. We propose a Bayesian incentive compatible pricing mechanism based on matching by replica-surrogate valuation functions. User valuations can be discovered by the mechanism, even when the users themselves do not fully understand their own valuations. Furthermore, users who are charged a Bayesian incentive compatible price have no reason to lie about the urgency of their jobs. The proposed mechanism achieves multiple desired truthful properties such as Bayesian incentive compatibility and ex-post individual rationality. We implement the proposed pricing mechanism. Through experiments in a Hadoop cluster with real-world datasets, we show that our prototype is capable of suppressing untruthful behavior from users.

We consider the manipulability of tournament rules for round-robin tournaments of n competitors. Specifically, n competitors are competing for a prize, and a tournament rule r maps the result of all n(n-1)/2 pairwise matches (called a tournament, T) to a distribution over winners. Rule r is Condorcet-consistent if whenever i wins all n-1 of her matches, r selects i with probability 1. We consider strategic manipulation of tournaments where player j might throw their match to player i in order to increase the likelihood that one of them wins the tournament. Regardless of the reason why j chooses to do this, the potential for manipulation exists as long as Pr[r(T) = i] increases by more than Pr[r(T) = j] decreases. Unfortunately, it is known that every Condorcet-consistent rule is manipulable. In this work, we address the question of how manipulable Condorcet-consistent rules must necessarily be - by trying to minimize the difference between the increase in Pr[r(T) = i] and decrease in Pr[r(T) = j] for any potential manipulating pair. We show that every Condorcet-consistent rule is in fact 1/3-manipulable, and that selecting a winner according to a random single elimination bracket is not alpha-manipulable for any alpha > 1/3. We also show that many previously studied tournament formats are all 1/2-manipulable, and the popular class of Copeland rules (any rule that selects a player with the most wins) are all in fact 1-manipulable, the worst possible. Finally, we consider extensions to match-fixing among sets of more than two players.

We consider a revenue-maximizing seller with a single item facing a single buyer with a private budget. The (value, budget) pair is drawn from an arbitrary and possibly correlated distribution. We characterize the optimal mechanism in such cases, and quantify the amount of price discrimination that might be present. For example, there could be up to 3·2k-1 -1 distinct non-trivial menu options in the optimal mechanism for such a buyer with k distinct possible budgets (compared to k if the marginal distribution of values conditioned on each budget has decreasing marginal revenue [CG00], or 2 if there is an arbitrary distribution and one possible budget [CMM11]).

Recent literature on approximately optimal revenue maximization has shown that in settings where agent valuations for items are complement free, the better of selling the items separately and bundling them together guarantees a constant fraction of the optimal revenue. However, most real-world settings involve some degree of complementarity among items. The role that complementarity plays in the trade-off of simplicity versus optimality has been an obvious missing piece of the puzzle. In “A Simple and Approximately Optimal Mechanism for a Buyer with Complements,” the authors show that the same simple selling mechanism—the better of selling separately and as a grand bundle—guarantees a $\Theta(d)$ fraction of the optimal revenue, where $d$ is a measure of the degree of complementarity. One key modeling contribution is a tractable notion of “degree of complementarity” that admits meaningful results and insights—they demonstrate that previous definitions fall short in this regard.

A seminal result of Bulow and Klemperer [1989] demonstrates the power of competition for extracting revenue: when selling a single item to n bidders whose values are drawn i.i.d. from a regular distribution, the simple welfare-maximizing VCG mechanism (in this case, a second price-auction) with one additional bidder extracts at least as much revenue in expectation as the optimal mechanism. The beauty of this theorem stems from the fact that VCG is a prior-independent mechanism, where the seller possesses no information about the distribution, and yet, by recruiting one additional bidder it performs better than any prior-dependent mechanism tailored exactly to the distribution at hand (without the additional bidder).

Bitcoin provides two incentives for miners: block rewards and transaction fees. The former accounts for the vast majority of miner revenues at the beginning of the system, but it is expected to transition to the latter as the block rewards dwindle. There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the block chain.

We study the communication complexity of combinatorial auctions via interpolation mechanisms that interpolate between non-truthful and truthful protocols. Specifically, an interpolation mechanism has two phases. In the first phase, the bidders participate in some non-truthful protocol whose output is itself a truthful protocol. In the second phase, the bidders participate in the truthful protocol selected during phase one. Note that virtually all existing auctions have either a non-existent first phase (and are therefore truthful mechanisms), or a non-existent second phase (and are therefore just traditional protocols, analyzed via the Price of Anarchy/Stability). The goal of this paper is to understand the benefits of interpolation mechanisms versus truthful mechanisms or traditional protocols, and develop the necessary tools to formally study them. Interestingly, we exhibit settings where interpolation mechanisms greatly outperform the optimal traditional and truthful protocols. Yet, we also exhibit settings where interpolation mechanisms are provably no better than truthful ones. Finally, we apply our new machinery to prove that the recent single-bid mechanism of Devanur et. al. [DMSW15] (the only pre-existing interpolation mechanism in the literature) achieves the optimal price of anarchy among a wide class of protocols, a claim that simply can't be addressed by appealing just to machinery from communication complexity or the study of truthful mechanisms.

We consider the problem of finding the kth highest element in a totally ordered set of n elements (Select), and partitioning a totally ordered set into the top k and bottom n − k elements (Partition) using pairwise comparisons. Motivated by settings like peer grading or crowdsourcing, where multiple rounds of interaction are costly and queried comparisons may be inconsistent with the ground truth, we evaluate algorithms based both on their total runtime and the number of interactive rounds in three comparison models: noiseless (where the comparisons are correct), erasure (where comparisons are erased with probability 1 − γ), and noisy (where comparisons are correct with probability 1/2 + γ/2 and incorrect otherwise). We provide numerous matching upper and lower bounds in all three models. Even our results in the noiseless model, which is quite well-studied in the TCS literature on parallel algorithms, are novel.

We provide a unified view of many recent developments in Bayesian mechanism design, including the black-box reductions of Cai et. al., simple auctions for additive buyers, and posted-price mechanisms for unit-demand buyers. Additionally, we show that viewing these three previously disjoint lines of work through the same lens leads to new developments as well. First, we provide a duality framework for Bayesian mechanism design, which naturally accommodates multiple agents and arbitrary objectives/feasibility constraints. Using this, we prove that either a posted-price mechanism or the VCG auction with per-bidder entry fees achieves a constant-factor of the optimal Bayesian IC revenue whenever buyers are unit-demand or additive, unifying previous breakthroughs of Chawla et. al. and Yao, and improving both approximation ratios (from 33.75 to 24 and 69 to 8). Finally, we show that this view also leads to improved structural characterizations in the Cai et. al. framework.

An efficient peer grading mechanism is proposed for grading the multitude of assignments in online courses. This novel approach is based on game theory and mechanism design. A set of assumptions and a mathematical model is ratified to simulate the dominant strategy behavior of students in a given mechanism. A benchmark function accounting for grade accuracy and workload is established to quantitatively compare effectiveness and scalability of various mechanisms. After multiple iterations of mechanisms under increasingly realistic assumptions, three are proposed: Calibration, Improved Calibration, and Deduction. The Calibration mechanism performs as predicted by game theory when tested in an online crowd-sourced experiment, but fails when students are assumed to communicate. The Improved Calibration mechanism addresses this assumption, but at the cost of more effort spent grading. The Deduction mechanism performs relatively well in the benchmark, outperforming the Calibration, Improved Calibration, traditional automated, and traditional peer grading systems. The mathematical model and benchmark opens the way for future derivative works to be performed and compared.

We consider the problem of a revenue-maximizing seller with $m$ items for sale to $n$ additive bidders with hard budget constraints, assuming that the seller has some prior distribution over bidder values and budgets. The prior may be correlated across items and budgets of the same bidder, but is assumed independent across bidders. We target mechanisms that are Bayesian Incentive Compatible, but that are ex-post Individually Rational and ex-post budget respecting. Virtually no such mechanisms are known that satisfy all these conditions and guarantee any revenue approximation, even with just a single item. We provide a computationally efficient mechanism that is a 3-approximation with respect to all BIC, ex-post IR, and ex-post budget respecting mechanisms. Note that the problem is NP-hard to approximate better than a factor of 16/15, even in the case where the prior is a point mass [Chakrabarty and Goel 2010]. We further characterize the optimal mechanism in this setting, showing that it can be interpreted as a distribution over virtual welfare maximizers. We prove our results by making use of a black-box reduction from mechanism to algorithm design developed by [Cai et al. 2013]. Our main technical contribution is a computationally efficient 3-approximation algorithm for the algorithmic problem that results by an application of their framework to this problem. The algorithmic problem has a mixed-sign objective and is NP-hard to optimize exactly, so it is surprising that a computationally efficient approximation is possible at all. In the case of a single item (m=1), the algorithmic problem can be solved exactly via exhaustive search, leading to a computationally efficient exact algorithm and a stronger characterization of the optimal mechanism as a distribution over virtual value maximizers.

We introduce single-bid auctions as a new format for combinatorial auctions. In single-bid auctions, each bidder submits a single real-valued bid for the right to buy items at a fixed price. Contrary to other simple auction formats, such as simultaneous or sequential single-item auctions, bidders can implement no-regret learning strategies for single-bid auctions in polynomial time. Price of anarchy bounds for correlated equilibria concepts in single-bid auctions therefore have more bite than their counterparts for auctions and equilibria for which learning is not known to be computationally tractable (or worse, known to be computationally intractable [Cai and Papadimitriou 2014; Dobzinski et al. 2015] this end, we show that for any subadditive valuations the social welfare at equilibrium is an O(log m)-approximation to the optimal social welfare, where $m$ is the number of items. We also provide tighter approximation results for several subclasses. Our welfare guarantees hold for Nash equilibria and no-regret learning outcomes in both Bayesian and complete information settings via the smooth-mechanism framework. Of independent interest, our techniques show that in a combinatorial auction setting, efficiency guarantees of a mechanism via smoothness for a very restricted class of cardinality valuations extend, with a small degradation, to subadditive valuations, the largest complement-free class of valuations.

We study the revenue maximization problem of a seller with n heterogeneous items for sale to a single buyer whose valuation function for sets of items is unknown and drawn from some distribution D. We show that if D is a distribution over subadditive valuations with independent items, then the better of pricing each item separately or pricing only the grand bundle achieves a constant-factor approximation to the revenue of the optimal mechanism. This includes buyers who are k-demand, additive up to a matroid constraint, or additive up to constraints of any downwards-closed set system (and whose values for the individual items are sampled independently), as well as buyers who are fractionally subadditive with item multipliers drawn independently. Our proof makes use of the core-tail decomposition framework developed in prior work showing similar results for the significantly simpler class of additive buyers [Li and Yao 2013; Babaioff et al.2014].

We provide polynomial-time approximately optimal Bayesian mechanisms for makespan minimization on unrelated machines as well as for max-min fair allocations of indivisible goods, with approximation factors of 2 and respectively, matching the approximation ratios of best known polynomial-time algorithms (for max-min fairness, the latter claim is true for certain ratios of the number of goods m to people k). Our mechanisms are obtained by establishing a polynomial-time approximation-sensitive reduction from the problem of designing approximately optimal mechanisms for some arbitrary objective to that of designing bi-criterion approximation algorithms for the same objective plus a linear allocation cost term. Our reduction is itself enabled by extending the celebrated “equivalence of separation and optimization” [27, 32] to also accommodate bi-criterion approximations. Moreover, to apply the reduction to the specific problems of makespan and max-min fairness we develop polynomial-time bi-criterion approximation algorithms for makespan minimization with costs and max-min fairness with costs, adapting the algorithms of [45], [10] and [4] to the type of bi-criterion approximation that is required by the reduction.

We study the outcomes of information aggregation in online social networks. Our main result is that networks with certain realistic structural properties avoid information cascades and enable a population to effectively aggregate information. In our model, each individual in a network holds a private, independent opinion about a product or idea, biased toward a ground truth. Individuals declare their opinions asynchronously, can observe the stated opinions of their neighbors, and are free to update their declarations over time. Supposing that individuals conform with the majority report of their neighbors, we ask whether the population will eventually arrive at consensus on the ground truth. We show that the answer depends on the network structure: there exist networks for which consensus is unlikely, or for which declarations converge on the incorrect opinion with positive probability. On the other hand, we prove that for networks that are sparse and expansive, the population will converge to the correct opinion with high probability.

We consider a monopolist seller with n heterogeneous items, facing a single buyer. The buyer hasa value for each item drawn independently according to(non-identical) distributions, and his value for a set ofitems is additive. The seller aims to maximize his revenue.It is known that an optimal mechanism in this setting maybe quite complex, requiring randomization [19] and menusof infinite size [15]. Hart and Nisan [17] have initiated astudy of two very simple pricing schemes for this setting:item pricing, in which each item is priced at its monopolyreserve; and bundle pricing, in which the entire set ofitems is priced and sold as one bundle. Hart and Nisan [17]have shown that neither scheme can guarantee more thana vanishingly small fraction of the optimal revenue. Insharp contrast, we show that for any distributions, thebetter of item and bundle pricing is a constant-factorapproximation to the optimal revenue. We further discussextensions to multiple buyers and to valuations that arecorrelated across items.

In the classical prophet inequality, a gambler observes a sequence of stochastic rewards V1, …, Vn and must decide, for each reward Vi, whether to keep it and stop the game or to forfeit the reward forever and reveal the next value Vi. The gambler's goal is to obtain a constant fraction of the expected reward that the optimal offline algorithm would get. Recently, prophet inequalities have been generalized to settings where the gambler can choose k items, and, more generally, where he can choose any independent set in a matroid. However, all the existing algorithms require the gambler to know the distribution from which the rewards V1, …, Vn are drawn. The assumption that the gambler knows the distribution from which V1, …, Vn are drawn is very strong. Instead, we work with the much simpler assumption that the gambler only knows a few samples from this distribution. We construct the first single-sample prophet inequalities for many settings of interest, whose guarantees all match the best possible asymptotically, even with full knowledge of the distribution. Specifically, we provide a novel single-sample algorithm when the gambler can choose any k elements whose analysis is based on random walks with limited correlation. In addition, we provide a black-box method for converting specific types of solutions to the related secretary problem to single-sample prophet inequalities, and apply it to several existing algorithms. Finally, we provide a constant-sample prophet inequality for constant-degree bipartite matchings. In addition, we apply these results to design the first posted-price and multi-dimensional auction mechanisms with limited information in settings with asymmetric bidders. Connections between prophet inequalities and posted-price mechanisms are already known, but applying the existing framework requires knowledge of the underlying distributions, as well as the so-called “virtual values” even when the underlying prophet inequalities do not. We therefore provide an extension of this framework that bypasses virtual values altogether, allowing our mechanisms to take full advantage of the limited information required by our new prophet inequalities.

We provide a computationally efficient black-box reduction from mechanism design to algorithm design in very general settings. Specifically, we give an approximation-preserving reduction from truthfully maximizing any objective under arbitrary feasibility constraints with arbitrary bidder types to (not necessarily truthfully) maximizing the same objective plus virtual welfare (under the same feasibility constraints). Our reduction is based on a fundamentally new approach: we describe a mechanism's behavior indirectly only in terms of the expected value it awards bidders for certain behavior, and never directly access the allocation rule at all. Applying our new approach to revenue, we exhibit settings where our reduction holds both ways. That is, we also provide an approximation-sensitive reduction from (non-truthfully) maximizing virtual welfare to (truthfully) maximizing revenue, and therefore the two problems are computationally equivalent. With this equivalence in hand, we show that both problems are NP-hard to approximate within any polynomial factor, even for a single monotone sub modular bidder. We further demonstrate the applicability of our reduction by providing a truthful mechanism maximizing fractional max-min fairness.

Consider a seller who seeks to provide service to a collection of interested parties, subject to feasibility constraints on which parties may be simultaneously served. Assuming that a distribution is known on the value of each party for service—arguably a strong assumption—Myerson's seminal work provides revenue optimizing auctions [12]. We show instead that, for very general feasibility constraints, only knowledge of the median of each party's value distribution, or any other quantile of these distributions, or approximations thereof, suffice for designing simple auctions that simultaneously approximate both the optimal revenue and the optimal welfare. Our results apply to all downward-closed feasibility constraints under the assumption that the underlying, unknown value distributions are monotone hazard rate, and to all matroid feasibility constraints under the weaker assumption of regularity of the underlying distributions. Our results jointly generalize the single-item results obtained by Azar and Micali [2] on parametric auctions, and Daskalakis and Pierrakos [6] for simultaneously approximately optimal and efficient auctions.

It was recently shown in [12] that revenue optimization can be computationally efficiently reduced to welfare optimization in all multi-dimensional Bayesian auction problems with arbitrary (possibly combinatorial) feasibility constraints and independent additive bidders with arbitrary (possibly combinatorial) demand constraints. This reduction provides a poly-time solution to the optimal mechanism design problem in all auction settings where welfare optimization can be solved efficiently, but it is fragile to approximation and cannot provide solutions to settings where welfare maximization can only be tractably approximated. In this paper, we extend the reduction to accommodate approximation algorithms, providing an approximation preserving reduction from (truthful) revenue maximization to (not necessarily truthful) welfare maximization. The mechanisms output by our reduction choose allocations via black-box calls to welfare approximation on randomly selected inputs, thereby generalizing also our earlier structural results on optimal multi-dimensional mechanisms to approximately optimal mechanisms. Unlike [12], our results here are obtained through novel uses of the Ellipsoid algorithm and other optimization techniques over non-convex regions.

We provide a reduction from revenue maximization to welfare maximization in multidimensional Bayesian auctions with arbitrary - possibly combinatorial - feasibility constraints and independent bidders with arbitrary - possibly combinatorial-demand constraints, appropriately extending Myerson's single-dimensional result [21] to this setting. We also show that every feasible Bayesian auction - including in particular the revenue-optimal one - can be implemented as a distribution over virtual VCG allocation rules. A virtual VCG allocation rule has the following simple form: Every bidder's type ti is transformed into a virtual type fi(ti), via a bidder-specific function. Then, the allocation maximizing virtual welfare is chosen. Using this characterization, we show how to find and run the revenue-optimal auction given only black-box access to an implementation of the VCG allocation rule. We generalize this result to arbitrarily correlated bidders, introducing the notion of a second-order VCG allocation rule. Our results are computationally efficient for all multidimensional settings where the bidders are additive, or can be efficiently mapped to be additive, albeit the feasibility and demand constraints may still remain arbitrary combinatorial. In this case, our mechanisms run in time polynomial in the number of items and the total number of bidder types, but not type profiles. This is polynomial in the number of items, the number of bidders, and the cardinality of the support of each bidder's value distribution. For generic correlated distributions, this is the natural description complexity of the problem. The runtime can be further improved to polynomial in only the number of items and the number of bidders in itemsymmetric settings by making use of techniques from [15].

We efficiently solve the optimal multi-dimensional mechanism design problem for independent additive bidders with arbitrary demands when either the number of bidders is held constant or the number of items is held constant. In the first setting, we need that each bidder's values for the items are sampled from a possibly correlated, item-symmetric distribution, allowing different distributions for each bidder. In the second setting, we allow the values of each bidder for the items to be arbitrarily correlated, but assume that the distribution of bidder types is bidder-symmetric. These symmetric distributions include i.i.d. distributions, as well as many natural correlated distributions. E.g., an item-symmetric distribution can be obtained by taking an arbitrary distribution, and "forgetting" the names of items; this could arise when different members of a bidder population have various sorts of correlations among the items, but the items are "the same" with respect to a random bidder from the population.

We show that every feasible, Bayesian, multi-item multi-bidder mechanism for independent, additive bidders can be implemented as a mechanism that: (a) allocates every item independently of the other items; (b) for the allocation of each item it uses a strict ordering of all bidders' types; and allocates the item using a distribution over hierarchical mechanisms that iron this ordering into a non-strict ordering, and give the item uniformly at random to the bidders whose reported types dominate all other reported types according to the non-strict ordering. Combined with cyclic-monotonicity our results provide a characterization of feasible, Bayesian Incentive Compatible mechanisms in this setting. Our characterization is enabled by a new, constructive proof of Border's theorem [Border 1991], and a new generalization of this theorem to independent (but not necessarily identically distributed) bidders, improving upon the results of [Border 2007, Che-Kim-Mierendorf 2011]. For a single item and independent bidders, we show that every feasible reduced form auction can be implemented as a distribution over hierarchical mechanisms that are consistent with the same strict ordering of all bidders' types, which every mechanism in the support of the distribution irons to a non-strict ordering. We also give a polynomial-time algorithm for determining feasibility of a reduced form auction, or providing a separation hyperplane from the set of feasible reduced forms. To complete the picture, we provide polynomial-time algorithms to find and exactly sample from a distribution over hierarchical mechanisms consistent with a given feasible reduced form. All these results generalize to multi-item reduced form auctions for independent, additive bidders. Finally, for multiple items, additive bidders with hard demand constraints, and arbitrary value correlation across items or bidders, we give a proper generalization of Border's Theorem, and characterize feasible reduced form auctions as multi-commodity flows in related multi-commodity flow instances. We also show that our generalization holds for a broader class of feasibility constraints, including the intersection of any two matroids.

Consider a gambler who observes a sequence of independent, non-negative random numbers and is allowed to stop the sequence at any time, claiming a reward equal to the most recent observation. The famous prophet inequality of Krengel, Sucheston, and Garling asserts that a gambler who knows the distribution of each random variable can achieve at least half as much reward, in expectation, as a "prophet" who knows the sampled values of each random variable and can choose the largest one. We generalize this result to the setting in which the gambler and the prophet are allowed to make more than one selection, subject to a matroid constraint. We show that the gambler can still achieve at least half as much reward as the prophet; this result is the best possible, since it is known that the ratio cannot be improved even in the original prophet inequality, which corresponds to the special case of rank-one matroids. Generalizing the result still further, we show that under an intersection of $p$ matroid constraints, the prophet's reward exceeds the gambler's by a factor of at most $O(p)$, and this factor is also tight.

Randomized mechanisms, which map a set of bids to a probability distribution over outcomes rather than a single outcome, are an important but ill-understood area of computational mechanism design. We investigate the role of randomized outcomes (henceforth, “lotteries”) in the context of a fundamental and archetypical multi-parameter mechanism design problem: selling heterogeneous items to unit-demand bidders. To what extent can a seller improve her revenue by pricing lotteries rather than items, and does this modification of the problem affect its computational tractability? Our results show that the answers to these questions hinge on whether consumers can purchase only one lottery (the buy-one model) or purchase any set of lotteries and receive an independent sample from each (the buy-many model). In the buy-one model, there is a polynomial-time algorithm to compute the revenue-maximizing envy-free prices (thus overcoming the inapproximability of the corresponding item pricing problem) and the revenue of the optimal lottery system can exceed the revenue of the optimal item pricing by an unbounded factor as long as the number of item types is at least 4. In the buy-many model with n item types, the profit achieved by lottery pricing can exceed item pricing by a factor of Θ(log n) but not more, and optimal lottery pricing cannot be approximated within a factor of (nε) for some ε > 0, unless NP ⊆ ∩δ>0 BPTIME . Our lower bounds rely on a mixture of geometric and algebraic techniques, whereas the upper bounds use a novel rounding scheme to transform a mechanism with randomized outcomes into one with deterministic outcomes while losing only a bounded amount of revenue.