Referral incentive design: VCG mechanisms and multilevel mechanisms

Joosung Lee; Seungwon Jeong

Referral incentive design: VCG mechanisms and multilevel mechanisms

Joosung Lee, Seungwon Jeong

Research output: Contribution to conference › Paper › peer-review

Abstract

We introduce a core-selecting mechanism, the groupwise-pivotal referral (GPR) mechanism, for auctions with referrals where buyers can only participate through referrals. Each buyer's type consists of a valuation and referable buyers.
In auctions with referrals, the Vickrey-Clarke-Groves (VCG) mechanism provides referral incentives, as opposed to the second-price auction (SPA), but it is not budget-feasible. In contrast, GPR is core-selecting, which also implies efficiency and budget feasibility. In GPR, bidders refer truthfully and have no incentive to underbid; any bidder and his referred bidders cannot be better off by misreporting; and any bidder cannot be better off using shill bidding. Moreover, GPR outperforms both VCG and SPA in terms of ex-post revenue.

Original language	English
Publication status	Published - 23 Jun 2018
Event	2018 Asian Meeting of the Econometric Society - Sogang University, Seoul, Korea, Republic of Duration: 21 Jun 2018 → 23 Jun 2018 http://ames.sogang.ac.kr/html/main.php

Conference

Conference	2018 Asian Meeting of the Econometric Society
Abbreviated title	AMES
Country/Territory	Korea, Republic of
City	Seoul
Period	21/06/18 → 23/06/18
Internet address	http://ames.sogang.ac.kr/html/main.php

Keywords / Materials (for Non-textual outputs)

referral mechanism
mechanism design
budget feasibility
core selection

2018 Asian Meeting of the Econometric Society
Lee, J. (Speaker)
21 Jun 2018 → 23 Jun 2018
Activity: Participating in or organising an event types › Participation in conference

Cite this

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title = "Referral incentive design: VCG mechanisms and multilevel mechanisms",

abstract = "We introduce a core-selecting mechanism, the groupwise-pivotal referral (GPR) mechanism, for auctions with referrals where buyers can only participate through referrals. Each buyer's type consists of a valuation and referable buyers. In auctions with referrals, the Vickrey-Clarke-Groves (VCG) mechanism provides referral incentives, as opposed to the second-price auction (SPA), but it is not budget-feasible. In contrast, GPR is core-selecting, which also implies efficiency and budget feasibility. In GPR, bidders refer truthfully and have no incentive to underbid; any bidder and his referred bidders cannot be better off by misreporting; and any bidder cannot be better off using shill bidding. Moreover, GPR outperforms both VCG and SPA in terms of ex-post revenue.",

keywords = "referral mechanism, mechanism design, budget feasibility, core selection",

author = "Joosung Lee and Seungwon Jeong",

year = "2018",

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day = "23",

language = "English",

note = "2018 Asian Meeting of the Econometric Society, AMES ; Conference date: 21-06-2018 Through 23-06-2018",

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TY - CONF

T1 - Referral incentive design

T2 - 2018 Asian Meeting of the Econometric Society

AU - Lee, Joosung

AU - Jeong, Seungwon

PY - 2018/6/23

Y1 - 2018/6/23

N2 - We introduce a core-selecting mechanism, the groupwise-pivotal referral (GPR) mechanism, for auctions with referrals where buyers can only participate through referrals. Each buyer's type consists of a valuation and referable buyers. In auctions with referrals, the Vickrey-Clarke-Groves (VCG) mechanism provides referral incentives, as opposed to the second-price auction (SPA), but it is not budget-feasible. In contrast, GPR is core-selecting, which also implies efficiency and budget feasibility. In GPR, bidders refer truthfully and have no incentive to underbid; any bidder and his referred bidders cannot be better off by misreporting; and any bidder cannot be better off using shill bidding. Moreover, GPR outperforms both VCG and SPA in terms of ex-post revenue.

AB - We introduce a core-selecting mechanism, the groupwise-pivotal referral (GPR) mechanism, for auctions with referrals where buyers can only participate through referrals. Each buyer's type consists of a valuation and referable buyers. In auctions with referrals, the Vickrey-Clarke-Groves (VCG) mechanism provides referral incentives, as opposed to the second-price auction (SPA), but it is not budget-feasible. In contrast, GPR is core-selecting, which also implies efficiency and budget feasibility. In GPR, bidders refer truthfully and have no incentive to underbid; any bidder and his referred bidders cannot be better off by misreporting; and any bidder cannot be better off using shill bidding. Moreover, GPR outperforms both VCG and SPA in terms of ex-post revenue.

KW - referral mechanism

KW - mechanism design

KW - budget feasibility

KW - core selection

M3 - Paper

Y2 - 21 June 2018 through 23 June 2018

ER -

Referral incentive design: VCG mechanisms and multilevel mechanisms

Abstract

Conference

Keywords / Materials (for Non-textual outputs)

Fingerprint

Activities

2018 Asian Meeting of the Econometric Society

Cite this