scholarly journals Robustly-Optimal Mechanism for Selling Multiple Goods

Author(s):  
Yeon-Koo Che ◽  
Weijie Zhong
Keyword(s):  
Mathematics ◽  
2021 ◽  
Vol 9 (10) ◽  
pp. 1147
Author(s):  
Natalia Aizenberg ◽  
Nikolai Voropai

In this paper, we discuss the demand side management (DSM) problem: how to incentivize a consumer to equalize the load during the day through price-dependent demand. Traditionally, the retail market offers several electricity payment schemes. A scheme is effective when the different tariffs satisfy different consumers. At the same time, the existing and generally accepted retail pricing schemes can lead to an "adverse selection" problem when all consumers choose the same price, thereby, reducing the possible general welfare. We propose an optimal design of pricing mechanisms, taking into account the interests of the electricity supplier and different types of consumers. The results of our work are that the optimal mechanism is implemented simultaneously for several periods, including the case when the ratio of types of consumers in periods changes. In addition, the mechanism proposed by us, in contrast to the studies of other researchers, provides an equilibrium close to the socially optimal maximum. We describe the implementation algorithm of the mechanism and provide examples of its action in the electric power system with different types and numbers of consumers.


Algorithmica ◽  
2021 ◽  
Author(s):  
Jie Zhang

AbstractApart from the principles and methodologies inherited from Economics and Game Theory, the studies in Algorithmic Mechanism Design typically employ the worst-case analysis and design of approximation schemes of Theoretical Computer Science. For instance, the approximation ratio, which is the canonical measure of evaluating how well an incentive-compatible mechanism approximately optimizes the objective, is defined in the worst-case sense. It compares the performance of the optimal mechanism against the performance of a truthful mechanism, for all possible inputs. In this paper, we take the average-case analysis approach, and tackle one of the primary motivating problems in Algorithmic Mechanism Design—the scheduling problem (Nisan and Ronen, in: Proceedings of the 31st annual ACM symposium on theory of computing (STOC), 1999). One version of this problem, which includes a verification component, is studied by Koutsoupias (Theory Comput Syst 54(3):375–387, 2014). It was shown that the problem has a tight approximation ratio bound of $$(n+1)/2$$ ( n + 1 ) / 2 for the single-task setting, where n is the number of machines. We show, however, when the costs of the machines to executing the task follow any independent and identical distribution, the average-case approximation ratio of the mechanism given by Koutsoupias (Theory Comput Syst 54(3):375–387, 2014) is upper bounded by a constant. This positive result asymptotically separates the average-case ratio from the worst-case ratio. It indicates that the optimal mechanism devised for a worst-case guarantee works well on average.


2021 ◽  
Author(s):  
Petteri Palonen ◽  
Teemu Pekkarinen

1996 ◽  
Vol 11 (2) ◽  
pp. 183-196 ◽  
Author(s):  
Shu-hsing Li ◽  
Kashi R. Balachandran

The purpose of this paper is to study transfer pricing under asymmetric information and taxation. In accordance with the empirical evidence documented in accounting literature, this paper assumes that the firm uses one pricing system instead of two pricing systems—one for the tax purposes and the other for internal control. We provide a closed-form solution for the optimal mechanism under a dual-price system, which allows for the price credited to the manufacturing division to not equal the price charged to the distribution division. The equilibrium outcomes of the analysis suggest several interesting findings. Under a dual-price system, both divisional accounting profits at equilibrium change in the same direction with respect to the change of tax rate. However, the direct effect is larger than the indirect effect. Under a dual-price system, the division with the lower tax rate should be credited more profits than the division with the higher tax rate, but it would not fully bear all the profits.


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