Sunday Seminar | Sergiu Hart, How Dull Are Monotonic Mechanisms, Sequential Mechanisms for Evidence Acquisition

Abstract:

Maximizing the revenue from selling two or more goods has been shown to require the use of _nonmonotonic_ mechanisms, where a higher-valuation buyer may pay less than a lower-valuation one. Here we show that the restriction to monotonic mechanisms may not just lower the revenue, but may in fact yield only a _negligible fraction_ of the maximal revenue; more precisely, the revenue from monotonic mechanisms is no more than k times the simple revenue obtainable by selling the goods separately, or bundled (where k is the number of goods), whereas the maximal revenue may be arbitrarily larger. We then study the class of monotonic mechanisms and its subclass of allocation-monotonic mechanisms, and obtain useful characterizations and revenue bounds.

Place: Elath Hall, 2nd floor, Feldman Building, Edmond Safra Campus

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