Computational Efficiency Requires Simple Taxation

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review


We characterize the communication complexity of truthful mechanisms. Our departure point is the well known taxation principle. The taxation principle asserts that every truthful mechanism can be interpreted as follows: every player is presented with a menu that consists of a price for each bundle (the prices depend only on the valuations of the other players). Each player is allocated a bundle that maximizes his profit according to this menu. We define the taxation complexity of a truthful mechanism to be the logarithm of the maximum number of menus that may be presented to a player. Our main finding is that in general the taxation complexity essentially equals the communication complexity. The proof consists of two main steps. First, we prove that for rich enough domains the taxation complexity is at most the communication complexity. We then show that the taxation complexity is much smaller than the communication complexity only in 'pathological' cases and provide a formal description of these extreme cases. Next, we study mechanisms that access the valuations via value queries only. In this setting we establish that the menu complexity - a notion that was already studied in several different contexts - characterizes the number of value queries that the mechanism makes in exactly the same way that the taxation complexity characterizes the communication complexity. Our approach yields several applications, including strengthening the solution concept with low communication overhead, fast computation of prices, and hardness of approximation by computationally efficient truthful mechanisms.

Original languageEnglish
Title of host publicationProceedings - 57th Annual IEEE Symposium on Foundations of Computer Science, FOCS 2016
PublisherIEEE Computer Society
Number of pages10
ISBN (Electronic)9781509039333
StatePublished - 14 Dec 2016
Event57th Annual IEEE Symposium on Foundations of Computer Science, FOCS 2016 - New Brunswick, United States
Duration: 9 Oct 201611 Oct 2016

Publication series

NameProceedings - Annual IEEE Symposium on Foundations of Computer Science, FOCS
ISSN (Print)0272-5428


Conference57th Annual IEEE Symposium on Foundations of Computer Science, FOCS 2016
Country/TerritoryUnited States
CityNew Brunswick

All Science Journal Classification (ASJC) codes

  • General Computer Science


Dive into the research topics of 'Computational Efficiency Requires Simple Taxation'. Together they form a unique fingerprint.

Cite this