In constrained multi-unit auctions, Myerson-style mechanisms are optimal for revenue-aligned objectives while buyer constraints enable strictly better outcomes for consumer-aligned objectives.
On the sufficiency of unidirectional incentive compatibility in auctions
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abstract
We study optimal auction design when the direction of bidders' deviations is restricted. We show that the optimal revenue when bidders can only underbid their true values cannot exceed the optimal revenue when bidders may freely underbid or overbid. Thus, unidirectional incentive compatibility is sufficient for full incentive compatibility for revenue maximization. We prove this equivalence through linear programming duality in a discrete model, which makes it possible to analyze the feasibility of allocation rules in multi-agent environments.
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cs.GT 1years
2026 1verdicts
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Optimal Auctions for Constrained Buyers
In constrained multi-unit auctions, Myerson-style mechanisms are optimal for revenue-aligned objectives while buyer constraints enable strictly better outcomes for consumer-aligned objectives.