Optimal pricing for MHR distributions

DOI10.1007/978-3-030-04612-5_11MaRDI QIDQ2190389zbMATH OpenOpenAlexFDO

Authors Yiannis Giannakopoulos, Kèyù Zhü

Publication date 18 June 2020

Full work available at URL https://arxiv.org/abs/1810.00800

zbMATH Keywords

Bayesian auctionMyersonian auctionposted-price selling mechanisms

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26)

Abstract: We study the performance of anonymous posted-price selling mechanisms for a standard Bayesian auction setting, where $n$ bidders have i.i.d. valuations for a single item. We show that for the natural class of Monotone Hazard Rate (MHR) distributions, offering the same, take-it-or-leave-it price to all bidders can achieve an (asymptotically) optimal revenue. In particular, the approximation ratio is shown to be $1+O(lnlnn/lnn)$, matched by a tight lower bound for the case of exponential distributions. This improves upon the previously best-known upper bound of $e/(e-1)approx1.58$ for the slightly more general class of regular distributions. In the worst case (over $n$), we still show a global upper bound of $1.35$. We give a simple, closed-form description of our prices which, interestingly enough, relies only on minimal knowledge of the prior distribution, namely just the expectation of its second-highest order statistic. Furthermore, we extend our techniques to handle the more general class of $lambda$-regular distributions that interpolate between MHR ($lambda=0$) and regular ($lambda=1$). Our anonymous pricing rule now results in an asymptotic approximation ratio that ranges smoothly, with respect to $lambda$, from $1$ (MHR distributions) to $e/(e-1)$ (regular distributions). Finally, we explicitly give a class of continuous distributions that provide matching lower bounds, for every $lambda$.

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Cited in

(10)

• Optimal pricing for MHR distributions
• Optimal auctions vs. anonymous pricing
• Performance bounds for optimal sales mechanisms beyond the monotone hazard rate condition
• Extreme value theorems for optimal multidimensional pricing
• Applications of -strongly regular distributions to Bayesian auctions
• Tight revenue gaps among multiunit mechanisms
• Pricing with samples
• Tight approximation ratio of anonymous pricing
• Extreme-value theorems for optimal multidimensional pricing
• On the approximability of simple mechanisms for MHR distributions

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