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Dynamic Price Sequence and Incentive Compatibility

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Book cover Automata, Languages and Programming (ICALP 2004)

Part of the book series: Lecture Notes in Computer Science ((LNCS,volume 3142))

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Abstract

We introduce and study a new auction model in which a certain type of goods is offered over a period of time, and buyers arrive at different times and stay until a common deadline (unless their purchase requests have been fulfilled). We examine in this model incentive compatible auction protocols (i.e., those that induce participants to bid their true valuations).

We establish an interesting connection between incentive compatibility and price sequence: incentive compatibility forces a non-decreasing price sequence under some assumptions on market pricing schemes. We should point out that negation of our assumptions would require market distortions to some extent.

Our protocol may not ensure that one item must be sold everyday. Imposing such a market intervention, we show an impossibility result that deterministic incentive compatible auction protocols do not exist. With randomized relaxation, we give such an incentive compatible auction protocol. We also discuss incentive compatible protocols under other market conditions.

This research is fully supported by a research grant (CityU1081/02E) from Research Grants Council of Hong Kong SAR, China, and research grants (60223004, 60321002, 60273045) from Natural Science Foundation of China.

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Author information

Authors and Affiliations

  1. Dept. of Computer Science, Fudan University, China

    Ning Chen

  2. Dept. of Computer Science, City University of Hong Kong,  

    Xiaotie Deng

  3. Dept. of Computer Science and Technology, Tsinghua University, China

    Xiaoming Sun

  4. Dept. of Computer Science, Princeton University,  

    Andrew Chi-Chih Yao

Authors
  1. Ning Chen
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  2. Xiaotie Deng
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  3. Xiaoming Sun
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  4. Andrew Chi-Chih Yao
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Editor information

Editors and Affiliations

  1. Departament de Llenguatges i Sistemes Informatics, Universitat Politecnica de Catalunya, Campus Nord - Ed. Omega, 240 Jordi Girona Salgado, 1-3 E-08034, Barcelona

    Josep Díaz

  2. Department of Mathematics and Turku Centre for Computer Science TUCS, University of Turku, 20014, Turku, Finland

    Juhani Karhumäki

  3. Department of Mathematics, University of Turku, Turku, Finland

    Arto Lepistö

  4. Laboratory for Foundations of Computer Science, University of Edinburgh,  

    Donald Sannella

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© 2004 Springer-Verlag Berlin Heidelberg

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Chen, N., Deng, X., Sun, X., Yao, A.CC. (2004). Dynamic Price Sequence and Incentive Compatibility. In: Díaz, J., Karhumäki, J., Lepistö, A., Sannella, D. (eds) Automata, Languages and Programming. ICALP 2004. Lecture Notes in Computer Science, vol 3142. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-27836-8_29

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  • DOI: https://doi.org/10.1007/978-3-540-27836-8_29

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-22849-3

  • Online ISBN: 978-3-540-27836-8

  • eBook Packages: Springer Book Archive

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