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Revenue maximization for market intermediation with correlated priors

Abstract:
We study the computational challenge faced by a intermediary who attempts to profit from trade with a small number of buyers and sellers of some item. In the version of the problem that we study, the number of buyers and sellers is constant, but their joint distribution of the item’s value may be complicated. We consider discretized distributions, where the complexity parameter is the support size, or number of different prices that may occur. We show that maximizing the expected revenue is computationally tractable (via an LP) if we are allowed to use randomized mechanisms. For the deterministic case, we show how an optimal mechanism can be efficiently computed for the oneseller/one-buyer case, but give a contrasting NP-completeness result for the one-seller/two-buyer case.
Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1007/978-3-662-53354-3_22

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Institution:
University of Oxford
Division:
MPLS
Department:
Computer Science
Role:
Author
More by this author
Institution:
University of Oxford
Division:
MPLS
Department:
Computer Science
Role:
Author
More by this author
Institution:
University of Oxford
Division:
MPLS
Department:
Computer Science
Role:
Author


Publisher:
Springer Verlag
Host title:
International Symposium on Algorithmic Game Theory: SAGT 2016: Algorithmic Game Theory
Volume:
9928
Pages:
273-285
Series:
Lecture Notes in Computer Science
Publication date:
2016-01-01
Acceptance date:
2016-07-01
DOI:
ISSN:
0302-9743
ISBN:
9783662533536


Pubs id:
pubs:634635
UUID:
uuid:81862785-8040-49a3-adca-fbede1f2e235
Local pid:
pubs:634635
Source identifiers:
634635
Deposit date:
2016-07-19

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