Profit Maximization in Mechanism Design
Stub. Revenue/profit-maximizing mechanism design: Bayesian optimal auctions (Myerson), prior-free approximation and optimal mechanisms, and frugality of procurement mechanisms. (AGT ch. 13)
Moves the mechanism designer’s objective from efficiency to revenue: Myerson’s Bayesian-optimal auction, prior-free approximation to the optimal mechanism (competitive analysis without a distributional assumption), prior-free optimal mechanism design, and frugality — how cheaply a procurement auction can hire a feasible solution.
Outline (TODO — flesh out each)
- Bayesian optimal mechanism design (Myerson’s lemma and auction)
- Prior-free approximations to the optimal mechanism
- Prior-free optimal mechanism design
- Frugality of mechanisms