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Improved Revenue Bounds for Posted-Price and Second-Price Mechanisms

Hedyeh Beyhaghi¹; Negin Golrezaei²; Renato Paes Leme³; Martin Pál³; Balasubramanian Sivan³

¹ Toyota Technological Institute at Chicago, Chicago, Illinois 60637-2803 · ² Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142; · ³ Google Research, New York, New York 10011;

How to optimize posted price mechanisms? The sequential posted-price (SPP) mechanism is one of the widely used selling mechanisms in practice. In this mechanism, the seller presents each buyer with a price sequentially and the buyer can either accept or reject the mechanism's offer. Despite the widespread use of the SPP mechanism, the problem of optimizing prices in this mechanism has not been fully addressed. In a paper entitled, “Improved Revenue Bounds for Posted-Price and Second-Price Mechanisms,” H. Beyhaghi, N. Golrezaei, R. Paes Leme, M. Pal, and B. Sivan construct SPP mechanisms by considering the best of two simple pricing rules: one that imitates the optimal mechanism and the other that posts a uniform price (same price for every buyer). Their simple pricing rules can be easily generalized to the setting with multiple units and yield the first improvement over long-established approximation factors.

DOI

10.1287/opre.2021.2121

Volume

69 (6)

Pages

1805-1822

Language

en

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