Loading...
Fair allocation in dynamic mechanism design
Fallah, Alireza Jordan, Michael I. Ulichney, Annie
Fallah, Alireza
Jordan, Michael I.
Ulichney, Annie
Supervisor
Department
Machine Learning
Embargo End Date
Type
Conference proceeding
Date
2024
License
Language
English
Collections
Research Projects
Organizational Units
Journal Issue
Abstract
We consider a dynamic mechanism design problem where an auctioneer sells an indivisible good to two groups of buyers in every round, for a total of T rounds. The auctioneer aims to maximize their discounted overall revenue while adhering to a fairness constraint that guarantees a minimum average allocation for each group. We begin by studying the static case (T = 1) and establish that the optimal mechanism involves two types of subsidization: one that increases the overall probability of allocation to all buyers, and another that favors the group which otherwise has a lower probability of winning the item. We then extend our results to the dynamic case by characterizing a set of recursive functions that determine the optimal allocation and payments in each round. Notably, our results establish that in the dynamic case, the seller, on one hand, commits to a participation reward to incentivize truth-telling, and, on the other hand, charges an entry fee for every round. Moreover, the optimal allocation once more involves subsidization in favor of one group, where the extent of subsidization depends on the difference in future utilities for both the seller and buyers when allocating the item to one group versus the other. Finally, we present an approximation scheme to solve the recursive equations and determine an approximately optimal and fair allocation efficiently.
Citation
A. Fallah, M. I. Jordan, and A. Ulichney, “Fair Allocation in Dynamic Mechanism Design,” Adv Neural Inf Process Syst, vol. 37, pp. 125935–125966, Dec. 2024, Accessed: Mar. 21, 2025. [Online]. Available: https://arxiv.org/abs/2406.00147.
Source
Advances in Neural Information Processing Systems (NeurIPS 2024)
Conference
Keywords
Dynamic mechanism design, Fair allocation, Revenue maximization, Subsidization strategies, Recursive allocation functions
Subjects
Source
Publisher
NEURIPS