The Hebrew University of Jerusalem Truthful Randomized Mechanisms for Combinatorial Auctions

We design two computationally-e cient incentive-compatible mechanisms for combinatorial auctions with general bidder preferences. Both mechanisms are randomized, and are incentivecompatible in the universal sense. This is in contrast to recent previous work that only addresses the weaker notion of incentive compatibility in expectation. The rst mechanism obtains an O( √ m)-approximation of the optimal social welfare for arbitrary bidder valuations this is the best approximation possible in polynomial time. The second one obtains an O(log m)approximation for a subclass of bidder valuations that includes all submodular bidders. This improves over the best previously obtained incentive-compatible mechanism for this class which only provides an O( √ m)-approximation.