Audited Auctions: Addressing Externalities in One-sided Mechanisms
About
We consider the form of externalities where some agent(s) have preferences over the outcome of a mechanism, and their preferences cannot be known before the mechanism is run. Often, this problem is solved by an auctioneer inserting dummy bids to represent the externalities. However, there may be ethical, trust, or power issues with delegating the determination of one's values to a central entity. To address this, we consider auctions where the auctioneer has the power to (randomly) audit bidders to learn their externality, and impose penalties accordingly. Our objective is to maximize total welfare, i.e. the sum of individual value and externalities. We show how penalty functions induce thresholds of participation, and prove analytically that welfare optimal participation thresholds in the i.i.d. setting with no competition are linear.
Speakers
Tejovan Parker
Tejovan is interested in using computation and the complex system perspective to understand how to better manage multi-agent, or socio-economic, systems. He is working with Marshall Van Alystyne, Xuezhou Zhang, and Francisco Marmolejo-Cossío to investigate simple economic mechanisms to improve equilibrium behaviors in partially-observed stochastic games with imperfect incentive alignments.
Tejovan began his PhD studies at BU in September 2022. Prior to this he studied Mechanical and Global Engineering at the University of Colorado Boulder.
Gabe McDonnell-Maayan
Gabe McDonnell-Maayan is a PhD candidate in Boston University's Faculty of Computing and Data Sciences whose work bridges computational innovation and pressing societal challenges. His research applies tools from complexity science—such as system dynamics modeling, agent-based modeling, and machine learning—to understand and influence the behavior of complex social systems. Gabe’s primary focus is advancing suicide prevention through computational modeling, enabling policymakers and practitioners to test interventions in silico before implementing them in the real world. Beyond suicide prevention, he has contributed to projects addressing sex trafficking, political polarization, pandemic response, and food security. Prior to his doctoral studies, Gabe worked as a software engineer at the MITRE Corporation and earned his Bachelor of Science in Computer Science from Rensselaer Polytechnic Institute.