Approximately-strategyproof and tractable multi-unit auctions

Abstract

We present an approximately-efficient and approximately-strategyproof auction mechanism for a single-good multi-unit allocation problem. The bidding language in our auctions allows marginal-decreasing piecewise constant curves. First, we develop a fully polynomial-time approximation scheme for the multi-unit allocation problem, which computes a (1+ε)≈ in worst-case time T = O(n3/ε), given n bids each with a constant number of pieces. Second, we embed this approximation scheme within a Vickrey-Clarke-Groves (VCG) mechanism and compute payments to n agents for an asymptotic cost of O(T log n). The maximal possible gain from manipulation to a bidder in the combined scheme is bounded by ε/(1+ε) V, where V is the total surplus in the efficient outcome.