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Journals ACM SIGecom Exchanges Volume 7 Issue 1

We identify and address algorithmic and game-theoretic issues arising from welfare maximization in the well-studied two-stage stochastic optimization framework. In contrast, prior work in algorithmic mechanism design has focused almost exclusively on optimization problems without uncertainty. We show both positive results, by demonstrating a mechanism that implements the social welfare maximizer in sequential ex post equilibrium, and also negative results, by showing the impossibility of dominant-strategy implementation. In this letter, we describe the relationship between mechanism design and stochastic optimization, and highlight our key technical results. An extended abstract will appear in WINE 2007, and a journal version is under preparation.

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Mechanism design for stochastic optimization problems

Ieong, Samuel; Sundararajan, Mukund; So, Anthony Man-Cho
ACM SIGecom Exchanges , Volume 7 (1)
Association for Computing Machinery – Dec 1, 2007

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