False-name-proofness in online mechanisms

In real electronic markets, each bidder arrives and departs over time. Thus, such a mechanism that must make decisions dynamically without knowledge of the future is called an online mechanism. In an online mechanism, it is very unlikely that the mechanism designer knows the number of bidders beforehand or can verify the identity of all of them. Thus, a bidder can easily submit multiple bids (falsename bids) using different identifiers (e.g., different e-mail addresses). In this paper, we formalize false-name manipulations in online mechanisms and identify a simple property called (value, time, identifier)-monotonicity that characterizes the allocation rules of false-name-proof online auction mechanisms. To the best of our knowledge, this is the first work on false-name-proof online mechanisms. Furthermore, we develop a new false-name-proof online auction mechanism for k identical items. When k = 1, this mechanism corresponds to the optimal stopping rule of the secretary problem where the number of candidates is unknown. We show that the competitive ratio of this mechanism for efficiency is 4 and independent from k by assuming that only the distribution of bidders’ arrival times is known and that the bidders are impatient.