[2003.00545] Simple Mechanisms for Agents with Non-linear Utilities
source link: https://arxiv.org/abs/2003.00545
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[Submitted on 1 Mar 2020 (v1), last revised 27 Oct 2022 (this version, v2)]
Simple Mechanisms for Agents with Non-linear Utilities
We show that economic conclusions derived from Bulow and Roberts (1989) for linear utility models approximately extend to non-linear utility models. Specifically, we quantify the extent to which agents with non-linear utilities resemble agents with linear utilities, and we show that the approximation of mechanisms for agents with linear utilities approximately extend for agents with non-linear utilities.
We illustrate the framework for the objectives of revenue and welfare on non-linear models that include agents with budget constraints, agents with risk aversion, and agents with endogenous valuations. We derive bounds on how much these models resemble the linear utility model and combine these bounds with well-studied approximation results for linear utility models. We conclude that simple mechanisms are approximately optimal for these non-linear agent models.
| Subjects: | Computer Science and Game Theory (cs.GT); Theoretical Economics (econ.TH) |
| Cite as: | arXiv:2003.00545 [cs.GT] |
| (or arXiv:2003.00545v2 [cs.GT] for this version) | |
| https://doi.org/10.48550/arXiv.2003.00545 |
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