Supply-limiting mechanisms

Tim Roughgarden, Inbal Talgam-Cohen, Qiqi Yan

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


Most results in revenue-maximizing auction design hinge on "getting the price right" - offering goods to bidders at a price low enough to encourage a sale, but high enough to garner non-trivial revenue. Getting the price right can be hard work, especially when the seller has little or no a priori information about bidders' valuations. A simple alternative approach is to "let the market do the work", and have prices emerge from competition for scarce goods. The simplest-imaginable implementation of this idea is the following: first, if necessary, impose an artificial limit on the number of goods that can be sold; second, run the welfare-maximizing VCG mechanism subject to this limit. We prove that such "supply-limiting mechanisms" achieve near-optimal expected revenue in a range of single- and multi-parameter Bayesian settings. Indeed, despite their simplicity, we prove that they essentially match the state-of-the-art in prior-independent mechanism design.

Original languageEnglish
Title of host publicationEC '12 - Proceedings of the 13th ACM Conference on Electronic Commerce
Number of pages18
StatePublished - 2012
Externally publishedYes
Event13th ACM Conference on Electronic Commerce, EC '12 - Valencia, Spain
Duration: 4 Jun 20128 Jun 2012

Publication series

NameProceedings of the ACM Conference on Electronic Commerce


Conference13th ACM Conference on Electronic Commerce, EC '12


  • mechanism design
  • prior-independence
  • revenue optimization

All Science Journal Classification (ASJC) codes

  • Software
  • Computer Science Applications
  • Computer Networks and Communications


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