Economic efficiency requires interaction

Shahar Dobzinski; Noam Nisan; Sigal Oren

doi:10.1016/j.geb.2018.02.010

Economic efficiency requires interaction

Shahar Dobzinski, Noam Nisan, Sigal Oren

Weizmann Institute of Science, Ben-Gurion University of the Negev, The Hebrew University of Jerusalem

Research output: Contribution to journal › Article › peer-review

Abstract

We study the necessity of interaction between individuals for obtaining approximately efficient economic allocations. We view this as a formalization of Hayek's classic point of view that focuses on the information transfer advantages that markets have relative to centralized planning. We study two settings: combinatorial auctions with unit demand bidders (bipartite matching) and combinatorial auctions with subadditive bidders. In both settings we prove that non-interactive protocols require exponentially larger communication costs than do interactive ones, even ones that only use a modest amount of interaction. (C) 2018 Published by Elsevier Inc.

Original language	English
Pages (from-to)	589-608
Number of pages	20
Journal	Games and Economic Behavior
Volume	118
Early online date	23 Mar 2018
DOIs	https://doi.org/10.1016/j.geb.2018.02.010
State	Published - 1 Nov 2019

Keywords

Combinatorial auctions
Communication complexity

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/j.geb.2018.02.010

https://arxiv.org/abs/1311.4721License: Other

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AB - We study the necessity of interaction between individuals for obtaining approximately efficient economic allocations. We view this as a formalization of Hayek's classic point of view that focuses on the information transfer advantages that markets have relative to centralized planning. We study two settings: combinatorial auctions with unit demand bidders (bipartite matching) and combinatorial auctions with subadditive bidders. In both settings we prove that non-interactive protocols require exponentially larger communication costs than do interactive ones, even ones that only use a modest amount of interaction. (C) 2018 Published by Elsevier Inc.

KW - Combinatorial auctions

KW - Communication complexity

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M3 - مقالة

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JO - Games and Economic Behavior

JF - Games and Economic Behavior

ER -

Economic efficiency requires interaction

Abstract

Keywords

All Science Journal Classification (ASJC) codes

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