Bidders often want to get as much as they can without violating constraints on what they spend. For example, advertisers seek to maximize the impressions, clicks, sales, or market share generated by their advertising, subject to budget or return-on-investment (ROI) constraints. Likewise, when bidders have no direct utility for leftover money – e.g., because the money comes from a corporate budg...

This paper is concerned with the procedural aspects of collective choice and the impact of the parties' participation rights on the optimal mechanism. We ̄nd that the mechanism designer generally bene ̄ts from the selective engagement of the agents | the exclusion of some agenttypes from the choice process. We show that optimization of mechanisms with voluntary participation involves two mutuall...

In a preference aggregation setting, a group of agents must jointly make a decision, based on the individual agents’ privately known preferences. To do so, the agents need some protocol (or mechanism) that will elicit this information from them, and make the decision. Examples of such mechanisms include voting protocols, auctions, and exchanges. In most real-world settings, preference aggregati...

We argue that when externalities such as pollution are nonexcludable, agents must be compelled to participate in a "mechanism" to ensure a Pareto-efficient outcome. We survey some of the main findings of the mechanism-design (implementation-theory) literature such as the Nash implementation theorem, the Gibbard-Satterthwaite theorem, the Vickrey-Clarke-Groves mechanism, and the Arrow/d'Aspremon...

Assume that we would like to design an auction for millions of buyers and items. Alternatively, we have a cloud of hundreds of thousands of computers on which we would like to schedule several millions of jobs. In the not-so-distant past, these ideas would have been unthinkable, but today, technological advances, especially the Internet, have led us to the point where they are not only possible...

We analyze an adverse selection environment with third party supervision. We assume that the supervisor and the agent can collude while interacting with the principal. As long as the supervisor is symmetrically informed with the agent, the former’s existence does not improve the principal’s rent extraction. This is due to the coalitional efficiency between the supervisor and the agent. However,...

These lecture notes cover the second third of the class CS364B, Topics in Algorithmic Game Theory, offered at Stanford University in the Fall 2005 term. They cover the topic of optimal mechanism design. As this is a traditional economic objective, we will review the Economics treatment of optimal mechanism design first before moving on to cover recent work on the problem from the theoretical co...

Mechanism design uses the tools of economics and game theory to design rules of interaction for economic transactions that will,in principle, yield some desired outcome. In the last few years this field has received much interest of researchers in computer science, especially with the Internet developing as a platform for communications and connections among enormous numbers of computers and hu...

This thesis looks into the economics of crowdsourcing using game theoretic modeling. The art of aggregating information and expertise from a diverse population has been in practice since a long time. The Internet and the revolution in communication and computational technologies have made this task easier and given birth to a new era of online resource aggregation, which is now popularly referr...

We characterize incentive compatible mechanisms in quasi-linear environments where the envelope theorem and revenue equivalence fail due to non-convex and non-differentiable valuations. Despite these obstacles, we obtain a characterization based on the familiar Mirrlees representation of the indirect utility and a monotonicity condition on the allocation rule. These conditions pin down the rang...