Undominated mechanisms

• Main Authors: BORGERS, Tilman, LI, Jiangtao, WANG, Kexin
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: robust mechanism design; undominated mechanisms; maxmin approrach; regret minimization; second-price auction; random reserve price; Economic Theory
• Online Access: https://ink.library.smu.edu.sg/soe_research/2773; https://ink.library.smu.edu.sg/context/soe_research/article/3772/viewcontent/Undominated_Mechanisms___Edited_.pdf
• Institution: Singapore Management University

We study the design of mechanisms when the designer faces multiple plausible scenarios and is uncertain about the true scenario. A mechanism is dominated by another if the latter performs at least as well in all plausible scenarios and strictly better in at least one. A mechanism is undominated if no other feasible mechanism dominates it. We show how analyzing undominated mechanisms could be useful and illustrate the tractability of characterizing such mechanisms. This approach provides an alternative criterion for mechanism design under non-Bayesian uncertainty, complementing existing methods.