Two-sided Auctions with Budgets: Fairness, Incentives and Efficiency

Abstract

This paper considers the fairness in the problem of budget-feasible mechanism design in two-sided markets where multiple sellers come with indivisible items and buyers come with budgets. Buyers could untruthfully claim their budgets to procure as much value of items as possible from sellers. Each seller with a single item is required to bid his cost since the cost is privately known, while the value of each item is publicly known. A viable mechanism should satisfy buyers’ fairness where a buyer with more budget can procure more value of items, and budget feasibility where buyers’ respective budgets are not exceeded. The goal is to investigate budget-feasible mechanisms that guarantee the fairness, incentives and efficiency simultaneously. We consider two models by distinguishing the types of items, one with homogeneous items and one with heterogeneous items. Our main contributions are the budget-feasible mechanisms for these models that guarantee the fairness, the truthfulness both on the sellers’ side and the buyers’ side, and constant approximation to the optimal total procured value from sellers.