Volume 3 (2007)
Article 9 pp. 179-195
Approximation Algorithms and Online Mechanisms for Item Pricing
Received: March 29, 2007
Published: October 3, 2007
Keywords: Combinatorial Auctions, Pricing Problems, Revenue Maximization, Approximation Algorithms, Online Optimization
ACM Classification: F.2, J.4
AMS Classification: 68W25, 68W20, 68Q32, 91B26
Abstract:
[Plain Text Version]
We present approximation and online algorithms for
problems of pricing a collection of items for sale so
as to maximize the seller's revenue in an unlimited supply
setting. Our first result is an
O(
k)-approximation
algorithm for pricing items to single-minded bidders who each
want at most
k items. This improves
over work of Briest and Krysta (2006) who achieve an
O(
k2) bound. For the case
k = 2, where we obtain a 4-approximation, this
can be viewed as the following
graph vertex
pricing problem:
given a (multi)graph
G with valuations
wij on the edges, find
prices
pi ≥ 0 for the vertices to
maximize
| ∑ |
(pi +
pj).
|
|
{(i,j): wij ≥
pi+pj}
|
We also improve the approximation of Guruswami et
al. (2005) for the
"highway problem" in which all desired subsets are
intervals on a line, from
O(log m + log n) to
O(log n),
where m is the number of bidders and n
is the number of items.
Our approximation algorithms can be fed into the
generic reduction of Balcan et al. (2005) to yield an
incentive-compatible auction with nearly the same performance
guarantees so long as the number of bidders is sufficiently
large. In addition, we show how our algorithms can be combined
with results of Blum and Hartline (2005)
and Kalai and Vempala (2003) to achieve good
performance in the online setting, where customers arrive one
at a time and each must be presented a set of item prices
based only on knowledge of the customers seen so far.